Financial depth, interest rate, savings relations in Turkey and policy implementations

The savings problem in the economy can be defined as low savings rates, inability to transfer existing savings to investments effectively or savings rates above investment rates. The saving problem in Turkey can be defined as remaining of domestic savings rates below fixed capital investment, the size of under the mattress saving and the inefficient use of existing savings. The saving problem in Turkey affects current account deficit and sustainable growth and weakens the potential of the economy. For the solution, the variables affecting the domestic savings should be determined and the policies produced should be focused on these variables. Social saving behavior and the variables that determine savings vary from country to country. However, some common points can be searched for. At the beginning of these points is the financial system, which is the market for the fund supply and the demanders. The financial system provides the efficiency of the funds by transferring the savings to channels such as investment or consumption in terms of the characteristics it carries. In this context, the development of the financial system and its services are important in terms of collecting and using savings. The development of the financial system is closely related to the "financial depth" and the "interest"concept, which is one of the fundamental building blocks of the financial system in the majority of economies. McKinnon-Shaw hypothesis which pioneered the "Financial repressive approach" by the defense, moving the argument that experienced the increase in savings by removing the financial liberalization and interest rate ceilings, financial deepening and real interest rates were selected as variables affecting savings in Turkey. One purpose of this study is to frame this issue by defining the problem of saving in Turkey and discusses the success of the policies implemented in selected countries in both examples in Turkey. Other objective is to test theoretical and empirical studies that the saving increase will be provided increasing by financial deepening and loosening of interest restrictions for the saving solution in Turkey. In line with this aim, econometric analysis was made to explain the depth of the financial order and the long-term relationship between the domestic savings and the direction and significance of this relationship. As a result of the study, M3 / GSYH and real deposit interest rate were found to have a positive and statistically significant effect on domestic savings for the period of 1980-2015. In this context, in order to for the solution of saving problems in Turkey, it was stated that the number of financial instruments and institutions should be increased and a financial system covering all segments of the society should be established. In order to keep this order in a sustainable manner, new policies on financial literacy can be developed and the social base can be expanded. Keywords: Saving Problem, Financial System, Financial Depth, Interest, Saving Policies.