The function and importance of central clearingin liquidity management in the finance system: Thecase of Takasbank (İstanbul Settlement and Custody Bank)

THE FUNCTION AND IMPORTANCE OF CENTRAL CLEARING IN LIQUIDITY MANAGEMENT IN THE FINANCE SYSTEM: THE CASE OF TAKASBANK (ISTANBUL SETTLEMENT AND CUSTODY BANK) ÖMER SELCEN With the increasing globalization trend around the world, banks' jobs and services have diversified. While commercial banks support this diversification by exporting new products, Takasbank supports the globalization trends of capital markets by taking measures that reduce systemic risk in the financial markets it serves and provides confidence to investors. Liquidity management of banks has also been affected by the change and diversification in global markets. In a globalized world, banks have not only been able to compete with banks in their own countries but also with all of the world banks, and instead of liquid assets that yield less in order to increase their profitability, they started to turn to higher yield but non-liquid assets. These assets, which have high risks together with their returns, caused the markets to face crises. At this point, the liquidity managers of the banks should decide between liquid assets with low return and less liquid assets with high return. In the first chapter, the asset and liability management in banking is explained by and large. Then the liquidty management is explained in commercial banking and Takasbank in a comparative manner. Then, in the third chapter, the central clearing role undertaken by Takasbank in liquidty risk management is elaborated. Keywords: Liquidity Management, Asset Liability Management, Risk Management