Foreign Banks Poised To Invest In Turkish Banking Sector

Lack of sufficient regulatory control over banks was one of various factors that led to Turkey’s most recent economic crises. Following a phase of sustained deflation in 2001, the need for a stricter monitoring system became evident, and the Turkish government has taken some concrete steps since then. Apart from the focus on corruption, a number of regulations have been introduced in order to prevent the repetition of any similar problems. Independent regulatory agencies have brought, and are continuing to bring, some major changes to the Turkish banking sector.

The Turkish government, relevant ministries, regulatory authorities and banking sector representatives have been discussing a major overhaul of the Turkish Banks Act since the year 2001. The fourth draft of the Financial Services Act ("Draft Act") was released to the public on the website of the Banking Regulation and Supervision Agency ("BRSA") on 24 November 2004, and the introduction of