tailieunhanh - Perspectives of turkish banks on Basel II

This research is concerned with Turkish banks’ perception on effectiveness of Basel II, it also aims to capture the possible ‘side-effects’ of Basel II on real economy. It examines how new regulations affect banks’ risk management strategies and bank-borrower relationships and analyzes the role of rating agencies and possible consequences of this intermediation on credit allocation to Small and Medium Sized Enterprises and on banks’ marketing strategy(ies). | Journal of Applied Finance Banking vol. 4 no. 6 2014 93-107 ISSN 1792-6580 print version 1792-6599 online Scienpress Ltd 2014 Perspectives of Turkish Banks on Basel II Sema Bayraktar1 Ayặe Evren Hoặgõr2 and Tarik Erhan Goztepe3 Abstract This research is concerned with Turkish banks perception on effectiveness of Basel II it also aims to capture the possible side-effects of Basel II on real economy. It examines how new regulations affect banks risk management strategies and bank-borrower relationships and analyzes the role of rating agencies and possible consequences of this intermediation on credit allocation to Small and Medium Sized Enterprises and on banks marketing strategy ies . The effects of new regulations on the competitive structure of the sector and the issue of procyclicality and financial volatility in emerging economies is also debated to understand the risk management environment in Turkey as well as the effectiveness of new regulation in enhancing the stability of Turkish banking system. The paper ends with a general discussion of the findings derived from open-ended interviews with risk managers of 24 banks and related authorities from the Turkish Banking Regulation and Supervisory Agency. JEL G24 G28 G29 Keywords Financial Institutions Banking Basel Risk Management 1 Discussion of Basel II Basel II has two fundamental objectives one of which is to develop a framework that would further strengthen the soundness and stability of the international banking system. 1 .However although it is widely acknowledged that Basel II regulation will improve the existing financial system it is also criticized for allowing the use of bank internal models to determine capital charges for boosting pro-cyclicality of the banking industry for reliance on rating agencies and for being an exclusionary discriminatory and a one-size-fits all approach 2 . For this reason it is not only important to discuss the possible side-effects of Basel II on real economy but also to .