Turkish Economy by Ahmet Faruk Aysan Mehmet Babacan Nurullah Gur & Hatice Karahan

Author:Ahmet Faruk Aysan, Mehmet Babacan, Nurullah Gur & Hatice Karahan
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

2.5 Liquidity Structure

The last global financial crisis revealed the importance of liquidity risk management, and many countries have accordingly changed their regulatory framework to mitigate several risks, including liquidity risk. Bank liquidity is a crucial component in managing bank assets. A resilient and robust liquidity management framework can ease the transformation of maturity between liabilities and assets. Without enough liquidity, a bank may face several risks, such as fiduciary risk, operational risk, maturity transformation risk, and other risks that affect the bank’s financial stability as a whole. Turkey did not experience a major liquidity problem during the global financial crisis and has not experienced one since the crisis . Currently, the liquidity position of the Turkish banking system is quite strong. The liquidity requirement ratio – up to a month – is more than 100% (Graph 7).

Graph 7Liquidity requirement ratio (Source: CBRT)

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