Global Financial Crisis: Economic Austerity Measures Of Turkey

The global financial crisis has been the worst financial crisis since the one related to the \nGreat Depression of the 1930s. It contributed to widespread business contraction, increases in \nunemployment, shrinking government revenues, declines in consumer wealth, and so a significant \ndecline in economic activity. Many causes have been cited about the global financial crisis by \nleading economists and experts. Both market-based and regulatory solutions have been presented \nto lessen the dramatic effects of the crisis. \nThe collapse of a housing bubble, which peaked in the United States in 2006, erupted in 2007 and \nled to a global financial crisis in 2008. This crisis has been triggered by a dramatic rise in \nmortgage delinquencies and foreclosures in the U.S. and has caused the values of securities tied to \nhousing prices. So it has damaged financial institutions all over the world. The financial crisis \nwhich began in industrialized countries quickly spread to emerging and developing economies. \nQuestions about bank liquidity, declines in credit availability, and damaged investor confidence \nhad a negative impact on global markets, and caused large losses during 2008. \nThis global crisis also affected Turkey. But the effects of this crisis on Turkey were limited. \nDemand in global and national markets has decreased. So the trade level in both national and \nglobal markets has also decreased. Bank‘s liquidity and profitability seemed healthy during such a \ncrucial crisis. There were several policies of Turkish Government to diminish the effects of \nfinancial crisis about interest rates, tax rates, exports rediscount credit limit etc. \nThis study aims to analyze the effects of the global financial crisis and the measures taken by \nTurkey to lessen the negative effects of it on Turkish economy.