Capital resource structure of banking system in Turkey and the change in the understanding of risk management

Banking in Turkey arose from the need of the government borrowing not to fulfil the traditional brokerage services. At the beginning the government borrowing was satisfied by Galata Bankers, who had domestic capital, however during the time banks with foreign funds took the place of these institutions. After the second constitutional, to develop the Turkish economy banks with domestic capital were established but the desired success weren?t provided. After the foundation of the Republic, in the banking sector the influence of the domestic capital increased, but over time capital source structure of the banks was changed depending on economy policies and many other variables.In the banking sector the most important risk is the credit risk. Due to globalisation of financial markets, technological developments, increasing in product diversity many different kinds of banking risks have increased. Turkish banking sector, in line with developments in the world have shown major changes in risk perception and risk management approach.In the first part of this study historical development of the structure of the Turkish banking sector?s capital resources is examined. In the second part risk and the risk management, legislation changes about these concepts and the applications at banks are analyzed. As a result, through all this study, the banks that were established at the last period of the Ottoman Empire; especially after the Kırım War in order to meet the need of government borrowing, the efforts to nationalize the banking sector after the second constitutional, the changes of the structure of the Turkish banking sector?s capital resources during the Republic period, the developments after the crises in November 2000 and February 2001 are examined.Key words: Banking Sector, The Structure of Capital Resources, Risk and Risk Management.