Turkey: Financial System Stability Assessment
IMF Staff Country Reports, November 9, 2007
Source details
- Canonical URL
- Turkey: Financial System Stability Assessment
Other formats
Bibliographic details
- Published: November 9, 2007
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451838206.002
Overview
- The assessment discusses macroeconomic developments and trends in the financial system of Turkey.
- Main judgment: the financial system does not appear to face major immediate threats, but vulnerabilities remain.
Key findings
- Turkey remains dependent on capital inflows and thus on international investor sentiment.
- Banks hold large amounts of public sector debt.
- Large holdings of public sector debt by banks make their solvency, profitability, and liquidity highly sensitive to adverse market revaluation of these securities in the event of external shocks or/and internal political uncertainties.
Risks and vulnerabilities
- Reliance on external capital inflows creates exposure to sudden stops or reversals in investor sentiment.
- Concentration of public sector debt on bank balance sheets amplifies sensitivity to market revaluations.
- Potential triggers of adverse revaluation include external shocks and internal political uncertainties.
Policy implications and recommendations (implicit in assessment)
- Monitor dependence on capital inflows and international investor sentiment.
- Reduce vulnerabilities from large bank holdings of public sector debt to improve solvency, profitability, and liquidity resilience.
- Strengthen macroprudential and risk-management frameworks to mitigate sensitivity to market revaluation and external shocks.
International Monetary Fund. Monetary and Capital Markets Department "Turkey: Financial System Stability Assessment", IMF Staff Country Reports 2007, 361 (2007), accessed 9/22/2026, https://doi.org/10.5089/9781451838206.002
Content in this bundle
- Turkey: Financial System Stability Assessment; IMF Country Report 07/361; May 3, 2007