Liberalization and development of capital markets in Turkey

Abstract

ABSTRACT 1980 's were the years of changes and important developments in the international financial system. Deregulation of financial markets blurred the distinction between capital and money market, led to a reduction in the restrictions on the financial institutions' operations, free movement of capital, free entrance of foreigners to the national financial markets, financial innovations and increasing use of new financial instruments... The result of this liberalization wave of national economies is an integrated financial system. As. a^ reflection of this trend, in Turkey, a number of important efforts-initiated by the enaction of Capital Market Law and including '`finally free repatriation of proceeds in securities' transactions- have been made to ensure that capital markets in Turkey resemble their Westwrn counterparts. Moreover, Turkey ' s application for full membership in EC is meaningful as far as it promotes the developments in Turkish capital markets. To what extent Turkey keeps up with these developments ? In thisstudy, some suggestions on this subject are made from the perspective of Turkish capital markets. For the purpose of this study, first chapter presents an overview of Turkish securities markets, seeking to highlight the dominance of banking system and public sector in Turkish financial system. In the second chapter liberalization effort of capital markets in EC and Turkey are discussed, given the related regulations; and an evaluation of the Turkish Capital Market's legislation is provided, aiming at an assessment of what have been achieved. Finally, some conclusions and recommendations based on the analysis are presented in the third chapter. II