Determination of financial risk of the commercial banks which operate in Turkey with the approach of artificial neural network

Financial failure is an important factor which directly affects a country?s economy. Company owners, employees, customers and public institutions significantly affected by the financial failure of the company.This study focused on the financial failure in the banking sector. Financial failures in the banking sector seriously harm to the national economies. For this reason, it is important to develop early warning systems that could prevent potential financial failures in the banking sector.In this study the financial variables (ratio) during the period 1996-2000 is used for estimating the financial conditions of banks in the period 2002-2009.The study consists of three parts. In the first part, the financial failure/definitions and causes of bankruptcy are presented. Then the effect of these failures to the national economy and the importance of early warning system have been mentioned. Finally the summary of the literature are presented.In the second part, the definition, historical development, structure and functioning of the model which will be used in the study are presented.In the last section, the estimated model in the application and comments that is made on it are presented.Keywords : Banking sector, Financial failure, Artificial neural network.