The Public banks and privatization

286 SUMMARY Along with the application of some liberal policies in the Turkish economy after 1980, some changes were also introduced in the banking system. Despite being few, public banks are able to influence the sector strongly in the Turkish banking system. At the time of capital shortages, public banks were established to boost economic development and to perform special tasks. The generally unprofitable public banks are in a position to prevent competition, which is one of the basic elements of the liberal economic system. Lack of organisation and control, as well as granting credits on the basis of political prefences without analysing the credits economically, negatively influence the structure of the sector. Developments such as increasing numbers of overdue accounts receivable, the necessity of public debts, transfers from the treasury to cover losses, depreciation of the working capital and the decrease in profits on equity has brought the necessity of privatising public banks to the agenda. As the numerical analysis indicates, the private banks are not only more profitable, but also they are not a burden for the state. As part of the adaptation period to the EU, Turkish banks will have to increase their competition power and profitable banks will have to withdraw from the sector. By measures such as reorganising their management, finance, personnel, capital and organisational structurs, first bringing their capital to a sufficient level, as well as solving the problem with outstanding credits, they can reach the EU standards. In privatising the public banks it is of importance to accord the necessary attention to forming the appropriate organisational structures, reorganisation, as well as the transition and offer stages. The information flow and the transparency in the sector should be sound. It should not be forgotten that the privatisation is not an end but a means and that its success requires it to be implemented in harmony with other economic policies.