Analysing the effects of foreign-owned banks to the Turkish banking sector

With the intensifying globalization trends in the world, goods and services have started to move across borders, thus by 1990s cross border investments have increased significantly especially in the developing countries. The globalization movement of goods and services has forced the financial markets to move to the overseas markets and the banks, being the most prominent players of the financial markets , have adapted themselves to these trends in the world firstly by just monitoring in order to satisfy their customers and secondly, by becoming more efficient and more profitable. Although the increase of the international banking investments in the national markets has mutual positive effects, this could have some drawbacks for the home countries. The main advantages of the foreign banks are seen as supporting the economical and the financial stability, development and improvement of the new banking products, technologies, surveillance and inspection applications and increases in quality. On the other hand, possible disadvantages can be listed as: foreign banks start dominating / ruling the financial system, small and medium ?sized businesses can be excluded from the credit facilities, the local banks could find themselves acting in more risky areas, foreign banks can withdraw themselves from the national markets in a crisis period and they may not comply with the national policies. Especially during a crisis period, one can observe changes in the attitudes of the foreign banks and their possible effects on the national markets could be fiercer than before or these effects could be realized in a different way. In this research, financial ratio indicators are used in order to evaluate the effects of foreign banks to the financial structure of banking system, therefore being able to observe the changes in time subject to banking groups.Keywords: Globalization, Foreign Banking Investments, Crisis, Financial Ratios