THE TURKISH BANKING SECTOR AT THE THIRD QUARTER AND THE END OF 1997

Since the beginning of the 1980s, Turkey has been trying to open out onto the world and integrate her economy with those of other countries: thus she has been increasingly affected by the global economy which itself is undergoing rapid change in the form of what is called globalisation. In the early 1980s, Turkey carried out economic reforms and turned towards a free market system, in a way that would serve as a useful example for many countries with transition economies and developing countries. An important facet of these economic reforms was the financial reforms that were introduced in the 1980s. The main aim of financial reforms is to ensure the mobilisation and effective use of domestic and foreign investments for rapid and sustainable economic growth and development. The basis of these reforms is the "financial deregulation and liberalisation" carried out for this purpose. By financial deregulation, the required legal framework was set up, and the existing regulations were improved. By financial liberalisation, regular markets were allowed to set the prices of foregin exchange, interest and other financial assets. The introduction of freedom of movement for capital and the amendments to the foreign exchange regulations accelerated the internationalisation of the financial markets. New, regulated markets and exchanges were established and the issue of numerous new financial instruments was made possible.