Turkey Introduces Additional Capital Adequacy Requirements For Banks Deemed "Too Big To Fail"

Turkey's Banking Regulation and Supervision Agency ("BRSA") has introduced a system for measuring and evaluating capital adequacy in banks which are "too big to fail". Principles and procedures are outlined to ensure domestic banks hold sufficient equity to balance damages related to probable risks. The Regulation is the latest in a series of Turkish banking regulation changes, which collectively develop a more compatible regulatory structure with the Basel standards. The Regulation on Measuring and Evaluating Capital Adequacy for Banks ("Regulation") was published in Official Gazette number 29633 on 23 February 2016.

The global financial crisis highlighted the necessity of close monitoring for systematically important banks ("SIB"). The paradigm shift came at the expense of "deregulated approach" that had become the modus operandi of financial markets and competent regulatory authorities in the pre-crisis era. Consequently, it became widely understood that measures