The risk of foreing exchange and its management in Turkish banking sector

THE RISK OF FOREIGN EXCHANGE AND ITS MANAGEMENT IN TURKISH BANKING SECTOR Student: Abdullah AYVA, Master?s Degree, The Banking Education Studies Advisor: Ass. Prof. Dr. Mehmet Arslan Banks have to face with many risks during their operations. The sources of these risks may be varying from globalization of international markets, the ambiguity in international markets, the emergence of new investment alternatives and the increase in financial risks to global inflation. The risks, being the natural elements of the banking sector, may threat the economies if they are not controlled properly. The absence of secure and stabilized economic areas and the lack of necessary measures may trigger some regional or global crises in many areas such as banking sector and exchange markets. The exchange market is the largest market in the world. They seem to be perfect markets since the transmission of information is so rapid and the realization of transactions is not restricted. Thus, foreign exchange rate is the most important determiner of several economic indicators of the national economies. In this context, the risk of foreign exchange may effect economies and the banks considerably. The banks have to take measures in order to be protected from foreign exchange risks. The study on ?The risk of foreign exchange and its management in Turkish banking sector? researches into the measures to be taken by the banks against the risk of foreign exchange, and also into the reasons, the results and evaluations on crises of November 2000 and February 2001 .