Contribution of public banks to Turkey's economic development process and Vakifbank case

The purpose of this study is to examine the contributions of public banks in the economic development policies implemented in Turkey in the period 1923-2020 and the role of Vakıfbank since its establishment. Since the Republic did not have sufficient capital accumulation in its early years, it did not have financial institutions that would provide development. In the closed period, local banking and foreign capital banking could not finance the establishment of industry branches, and an important sector such as insurance could only be formed with public and domestic national banks. The public banks, which were established as specialized banks with the implementation of the statist policy, provided the necessary financing for investments by taking high risks, and some of them made direct investments in various sectors by participating in their founding capitals. Although some of our public banks have not been able to continue their activities until today, Türkiye Vakıflar Bankası and other reputable public banks still continue their activities. The share of the institutional structure in public banking is very important in the development of savings habits and trust in deposits. During the Second World War, statist practices were interrupted and production fell. Public banking contributed significantly to the financing of defense expenditures of public banks during the World War II, the modernization of agriculture within the scope of the post-war agriculture-based growth model, the realization of large investments with the import substitution industrialization implemented since the 1950s, the development of the private sector and even the continuation of employment. Although the share of public banking in the sector has been reduced within the scope of liberal policies after 1980, its position in the economic development process continues. In the analysis, end-of-period bank balance sheets of BAT and BRSA since 1958 and data in various publications were used.