Bank Consolidations As A Result Of The Economic Crises In Turkey In Post-1980s

ABSTRACTMaster ThesisBank Consolidations As A Result Of The Economic Crises In Turkey In Post-1980sOzan KAYARKAYADokuz Eylul UniversityInstitute Of Social SciencesEconomy DepartmentDue to a number of effects which appeared within the Industrial Revolution,world economies gained momentum and capitalist system started to be a maindriver in the world. Especially the developments that occurred in post-1980smade the market economy to be a world-wide economic model. However, thecapitalist system faced frequent political and economic breakups during itsdevelopment process. And the 20th century is known to be a period in which theworld experienced the most of those breakups. It is clear that the breakupsdirected its dimension to financial crisis after 1980s. The countries which aremost affected by those crises are, without a doubt, the developing ones, wherethe devastating effects of these can be seen for a longer period of time. And eachcrisis in developing countries resulted in important changes in financialmarkets.Turkey has given weight to liberalization policies in post 1980s and struggled tointegrate itself in the free market economy. This struggle speeded up thecountry?s economic development and generated financial markets.Unfortunately Turkey, just like the other examples in the world economy,suffered from severe economic crises in post 1980s. For this reason, bankingsector had to face many important situations.Banking sector experienced rapid development as parallel to the developmentsin Turkish economy post 1980s. Unlike their primary functions, the banks hadto provide funds for the public sector because of high budget deficits andinflation. This process was too risky for the poorly checked banking operations.In the long run, the banks, which were vulnerable to all kinds of crises, couldnot resist any more and they either went bankrupt or were converted to thefund. After that most banks in Turkey had to consider consolidation in order togain strength. Also by the economic stabilization provided in 2002, foreignbanks gained access in Turkish banking sector. This access showed itself inpurchasing or consolidation of banks. It is believed that Turkish banking sectorwill suspend its growth by consolidations not only to resist the breakups thecrises bring, but also to compete with the banking giants in the world.Keywords: 1) crisis 2) economic crisis 3) banking sector4) consolidation 5) bank consolidations