LESSONS FROM THE CRISIS – TURKISH BANKING CRISIS OF 2000-2001

In the past two decades or so the Turkish banking system has experienced many changes especially with the liberalization of the financial markets, financial inovations, inovations in the information technology and the increase in the number of financial transactions. With consolidations, competition has grown among banks and they are now competing for smaller profit margins. With all these changes, there has also been a change in the type of risks to which banks are now exposed. If the banking system in Turkey is following the right path as the authorities in Turkey claim then how did the country get into the grip of the banking crisis of 2000-2001? What went wrong and why bank loans turned into bad debts must be examined. The Turkish Experience resulting from the financial crisis of 2000-2001 shows that the country has learned the lesson. The financial crisis of 2008 hadn't an impact so great in Turkey compared with other countries.