The Macro-Prudential Measures Taken in Turkey Following the 2008-2009 Global Financial Crisis

Abstract

The objective of this study is to examine the macro-prudential measures that were taken in Turkey between 2010 and 2015 within a holistic, and, an organized framework, to demonstrate the extent to which the prudential policy tools were used, and, to explain which Basel III standards were adopted in Turkey. In this sense, to our knowledge, this is the first and the most comprehensive study that deals with the macro-prudential measures in Turkey during the period 2010-2015. We reviewed all relevant legislation and reports regarding financial stability and macro-prudential measures. Then, we fit all macro-prudential policy tools into a framework which consists of loan-related measures, liquidity-related measures, and, capital-related measures. Furthermore, we incorporated Basel III standards with our framework in order to expand the scope of our analysis. Within the period under consideration, Turkey utilized all of the tools, except the limit on foreign currency lending, the limit on net open foreign currency position, the limit on currency mismatches. The authorities put 93 regulations into practice in total. 2013, 2011 and 2015 were the years in which the regulations were issued most extensively.