The effects of credit rating agencies on the Turkish banking sector

The ambition to make more profits in the globalizing world increases the asymmetric information in the markets and increases the cost of accessing the right information. Credit rating agencies (CRA) come into play in order to eliminate the lack of information in the market and to reach the right information at a lower cost. In order to ensure that buyers and sellers in the market move more healthily, the CRA's make risk assessments with their own notes, in particular countries, companies, banks and many entities and receive a certain fee in return. The CRA's are increasing their importance Although they are criticized over their reliability with the wrong decisions that they have given. The aim of this study is to find out how the decisions of the CRA's affect the Turkish banking sector. In this respect, first of all, the rating activity, major ınternational rating agencies and the development of the banking sector have been put forward. Later on, syndicated loan, which is an important input for banks, was explained, and the effect of syndicated loan on the decisions of the CRA's was tried to be determined. Within this study, it has been reviewed the the received notes by S&P, Fitch and Moody's company of Turkey's nine largest banks in asset size between 2000-2018 years and the syndication loan obtained in these years was transferred from the annual reports of the banks to tables and graphs and the effect of the rating on the syndicated loan. As a result of the study, despite the criticism of the rating agencies, it has been determined that they have gradually increased their importance and that the rating grade within the selected banks has an effect on the syndicated loan. It was concluded that the decisions made by the CRA's affected the Turkish banking sector. In addition, it was found that the CRA's contributed to the integration of the Turkish banking sector with foreign economies, but that Turkish banks did not perform adequately on the importance and awareness of credit rating. Keywords: Rating, Credit Assessment Institutions, Turkish Banking Sector, Syndicated Loan.