Structural analysis of the Turkish banking sector in the face of crises

The banking crises are the result of the loss of confidence in the financial system and the savings holders rush to the banks to withdraw their deposit balances; resulting in bankruptcy of banks. In the historical process, the banking crises that started with the liquidation of the Bank Of İstanbul during the Ottoman period; continued during the 1930-1980 period with the effects of The World Economic Depression of 1929, The Second World War and The 1958 Crisis. Financial liberalization, which started in the 1980's without the necessary structural arrangements, formed the basis of economic problems. In the 1990's, the increase in inflation, current account deficit, borrowing amount, interest rates and exchange rates were among the causes of the 1994 and November 2000 crises. Stabilization programs implemented after both crises have not been effective enough. In the period of February 2001, the liquidity crisis, which emerged due to the foreign exchange demand of the banks, quickly turned in to a financial crisis. In the aftermath of the crisis,The Transition to Strong Economy Program was put in to effect in order to repair the damage on the economy. With this program, the country's economy and the Türkish banking sector entered a rapid recovery after 2002. Thanks to the positive effects of the restructring, the Turkish banking sector was able to stand strong against The 2008 Global crisis. Despite some small-scale deviations in some banking indicators in some years, the stable development of the sector continued after 2010 as well.