Application and effects of securitization in Turkey, problems and suggestions

İİİ ABSTRACT Securitization has first started in mid-1970s in the United States. The system, which is based on the receivables that have a low default risk and a high turnover, enables both the liquidation of the assets and creation of new sources. Securitization can be classified in two groups depending whether or not the receivables are taken out of the balance sheet of the firm. Taking the receivables out of the balance sheet is much more advantageous but a special purpose vehicle is needed for taking over the receivables, carrying out the tasks of collection, payment and the like, in that case. The regulation of securitization in Turkey is mainly based on the applications in the United States but there has been some distinctions because of certain conditions that have been brought out. Until today, securitization has only been realized by banks and none of the industrial firms have been interested in securitization, because of the following reasons: The issuers out of the banks ought to have a bank guarantee, the source firm continues to be responsible of the payments even if the receivables are transferred., the secondary market is not regulated., the rating firms do not exist, although asset backed securities are not advantageous in terms of cost compared with bonds and commercial papers, the issuing procedure is very complicated, the money that has Taeen collected by banks by that way is free of reserveIV requirements ı a minimum amount of capital requirement and an operation limit is brought out for special purpose vehicle, and so on. As a result, no special purpose vehicle has been founded till now. Because the receivables can not be taken out of the balance sheet of the banks and no proper relationship exists between the receivables and the issued securities, the issue of asset backed securities by the banks is not different from the issue of bonds and commercial papers in today's practice.