Banks risk rating -model proposal and implementation

The purpose of the Study is to try to predict the solvency of banks, which will be created with the help of an econometric model. In the first chapter of the study , the concept of rating and its importance for financial markets is focused on.In the second chapter of the study, the application areas of rating is mentioned and information about criteria used in rating is given.In the third chapter of the study, the general assessment of the overall sector is made and the minimum data features needed for operation is mentioned.Also the reasons for the selection of banking sector is explained and limitations and assumptions of the study are included.In this section,also BASEL Regulation is included, the importance of rating for the Turkish banking sector is described and legal regulations on this issue in recent times is emphasized.In the fourth chapter which is implementation section of the study,an econometric model study by using the data of 10 bank's financial statements existing detailed rating note and collecting deposits in the Turkish banking sector in the period 2004-2007 is made.The model is tested on 6 bank existing a similar data for the same period using by model results and a comparison is made with actual situation. As a result of tests it is concluded that the credit rating notes of deposit banks active in the Turkish Banking Sector can be estimated with a low deviation with the model.Key Words1. Rating2. Credit Rating3. Banking4. Bank Risk Rating5. BASEL