Financial contagion effect: Example of Turkey global crises

Financial crises have been effective, in a single market as well more than one country?s economy profoundly at the same time. A shock which is appearing at the back of beyond, can influence different regions or countries within a short time because of development of international trade, financial liberalization and improvement in technology.Usage of ?financial contagion? as an economic term, has increased by the financial crises have been experienced because of the same shock effect in more than one region. The most dramatic example of financial contagion was experienced in 1997 ? 1998 Asian crises.After the USA subprime mortgage bubble boom, important financial institutions and banks went bankruptcy. This situation was a common shock for developed and developing countries for financial contagion.In this study, we analyze financial crises, the transmission channels of shocks and the infection of 2008 global crises to Turkey. Using the Multivariate GARCH analyze and the LIBOR ? OIS Spread, S&P 500 USA index, TL/$ exchange rate, IMKB 100 $ index and interest rate data, we find evidence about contagion proportional with literature.Key Words: Financial crises, financial contagion, contagion, transmission mechanisms, MGARCH.