ABOUT TURKEY
Modern Turkey has a civil law system similar to that of most other European countries. According to the classifications of European law, Turkish law belongs to the family of Continental European law. This form of law contains classes including Common law, Continental European law, Islamic law, Socialist law, and American law. After the disintegration of the Ottoman Empire and the creation of the republic of Turkey, the Turkish state aimed to establish its legal and social order according to Western norms. To this end, the framers of the Republic took very radical actions. In 1924, the Turkish Grand National Assembly (TBMM) passed a law to abolish the Sharia (religious) courts (Ser’iye Mahkemeleri). In 1926, the TBMM abolished Islamic law and forced the Switzerland Federal Code Civil law system (with adaptations for Turkish society) into the new state legal arena. The German Commercial code was added into Turkish Commercial law. In addition, the Italian Criminal code of 1889 was adapted and put into effect on July 1926. However, a new Turkish Criminal law became effective in June 2005 in order to comply with the European Union law. Turkish law was made to resemble the Continental European Civil law. The Turkish Parliament now enacts new laws and regulations on a daily basis to conform to EU standards.
There is another enormous struggle in the legal arena of modern Turkey. The Second Constitution of the Republic (The Constitution of 1924); article 2 stated that the state religion was Islam. The fathers of the Republic, however, believed that secularism must be one of the most important tools of modern Turkish society. Thus in 1928, although the religion of the state was Islam, this was deleted from the Constitution at that time. Today, the modern Turkish state struggles with its secularist traditions in light of an Islamic citizenry. Traditional Turkish state officials prefer to follow the French and German version of secularism, instead of that of the UK, Canadian and American forms. The Turkish state still wishes to design and control thought and religious belief. Some foreign observers of Turkey believe that the orientation of secularism will be one of the keystones to the future of Turkish society and policy practices.”
INTRODUCTION
Turkey’s financial system and its banking sector are virtually synonymous as a consequence of the country’s economic and historical development. Many of the transactions and activities in both the money and capital markets are carried out by banks, as the banking sector constitutes the major part of the Turkish financial system.
LEGAL FRAMEWORK AND SUPERVISION OF THE BANKING SYSTEM
All banks in Turkey are subject to the Banking Act and to the provisions of other laws pertaining to banks. Prior to the changes in Banks Act No. 4389, which went into effect on June 23, 1999, the Treasury Undersecretariat and the Central Bank had been the two main regulatory and supervisory bodies in the banking sector. With this Act, the Banking Regulation and Supervision Agency (BRSA), with financial and administrative autonomy, was formed. The mission of the agency is to safeguard the rights and benefits of depositors and create the proper environment in which banks and financial institutions can operate with market discipline, in a healthy, efficient and globally competitive manner, thus contributing to the achievement of the country's long-term economic growth and stability. With the establishment of the BRSA, the Savings Deposits Insurance Fund (SDIF), previously under the authority of the Central Bank, started to operate under the administration of the BRSA. Later on, with the enactment of Act No. 5020 on December 26, 2003, the management of the SDIF was separated from the management of the BRSA. The decision-making body of the agency is the Banking Regulation and Supervision Board (BRSB), which is appointed by the Council of Ministers (Cabinet) and has seven members. Following the appointment of the members of the board, the agency commenced its operations as of August 31, 2000. Banks in Turkey have the status of joint-stock companies and are subject to general controls under the provisions of the Turkish Commercial Code and of various tax laws. Moreover, banks are subject to special supervision by the Banking Regulation and Supervision Agency [1]. As the representative body of the banking sector, the Banks Association of Turkey (BAT) aims to protect and promote the professional interests of its members. The BRSA exercises its supervisory authority on a direct and ongoing basis in terms of legal considerations and financial soundness. Additionally, the banks’ financial statements are audited by external auditors in accordance with internationally accepted principles of accounting. Banks are also examined by their own auditors, who are required to submit quarterly reports to the BRSA.
For the purpose of bringing further competitive force to the financial system, minimizing the risks that may arise, reducing the costs of operation and intermediation to achieve integration with other regulations and implementations of financial markets, a more active and more transparent financial system by providing a more active course of the markets, a new Banking Act (5411) was issued on November 1, 2005. In the process of preparing this act, international standards were used, including the National Program, Urgent Action Plan of the 59th Government, European Union Improvement Report, Turkey Report of the Organization for Economic Cooperation and Development (OECD), EU directives, Bank for International Settlements (BIS) Core Principles for Effective Bank Supervision, OECD Corporate Management Principles, the laws of EU member states, important provisions in the laws of certain countries, and the experience of the BRSA and SDIF.
STRUCTURE AND FINANCIAL DATA
As of December 2006, there were 50 banks operating in Turkey. Thirteen of these banks are investment and development banks, and the rest are commercial banks. Four of the commercial banks (excluding one SDIF bridge bank) and three of the investment banks are state owned. The total number of foreign banks is 15. There are four participation banks as well. There are no local banks, and most of the banks are multi-branched. The total number of branches in the system rose to 7,296 as of December 2006. [1] Detailed information on the BRSA and its activities can be found at the agency’s website, www.bddk.org.tr [2] Detailed information on the BAT and its activities can be found at its website, www.tbb.org.tr
Source: http://www.byegm.gov.tr/REFERENCES/banking.htm
The original Turkish mainland was in Central Asia, covering the north of Afghanistan, the Himalayan Mountains, and the west and northwest of China. The Turkish language was originally derived from the Altaic language group. However, modern Turkish is a mixed version of Ottoman Turkish and Anatolian Turkish. Before the acceptance of Islam, Turks followed Shamanism, the belief in the elements of nature and spiritualism. In today’s world, the majority of Turks are Sunni Muslims. There are also small amounts of Shiite Muslims and Christian Turks. The Christians presently reside on the Russian Federation borders, such as Chuvash, Yakut, and Gagaoguz.
In the past, Turks structured many states and empires, including, Gokturk Kaganate, Uygurs, Karahanids, Mughals, Khazars, Kuman-Kipcaks, Turco-Mongols (those are established in Central Asia), Mamlukes (Egypt), Ghaznevids (India peninsula), the Seljuks (the Caspian region, the Middle East, and Anatolia), and the Ottoman. Around the 8th Century, Turks began to convert to Islam because of their relations with Arab Muslims. In the 11th Century Turks began to come to Anatolia and in 1071 the Seljuk Turkish Army defeated the Byzantinian Army in Malazgirt, Eastern Anatolia. During the Seljuk Turkish Empire, Turks became a powerful force within the Islamic World.
After the fall of the Seljuk, around the last quarter of the Thirteenth Century, the Ottoman State appeared in the historical arena. The Ottoman Empire ruled as one of the most powerful and lengthy empires in all of world history. It spanned from 1280s to 1923. The Ottoman Empire’s power spanned three continents, Asia, Europe and Africa, which included such countries; Albania, Greece, the former Yugoslavia, Romania and the islands of the Eastern Mediterranean, parts of Hungary and Russia, Iraq, Syria, Palestine the Caucasus and Egypt, North Africa, and the Arabian peninsula. During the Ottoman era Anatolia was the center of the Islamic World. The Ottoman Empire era was known to have given great respect to other religions, cultures, languages, and races, though it ruled with Islamic law, under the Hanefi school of thought (one of the four Sunni sects).
In 1923, after the disintegration of the Ottoman Empire, Turkey became a Republic under the leadership of Mustafa Kemal Ataturk. The founders of the Republic designed Turkey as a unitary parliamentarian democratic state, based on nationalistic, democratic, and secular principles. Turkish secularism was established to eliminate religious thought and practice from society, under the auspices that this was necessary to modernize the nation.
