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Rebuilding The Financial Architecture Ersin Özince Chief Executive Officer

Rebuilding The Financial Architecture Ersin Özince Chief Executive Officer Türkiye İş Bankası A.Ş. October 2010. GLOBAL ECONOMY. O ne of the deepest and longest crises in history …. Source: IMF. FINANCIAL SECTOR REGULATIONS. Reform Agenda :

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Rebuilding The Financial Architecture Ersin Özince Chief Executive Officer

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  1. RebuildingTheFinancialArchitecture Ersin Özince Chief Executive Officer Türkiye İş Bankası A.Ş. October 2010

  2. GLOBAL ECONOMY One of the deepest and longest crises in history… Source: IMF

  3. FINANCIAL SECTOR REGULATIONS • Reform Agenda: • Strengthening bank capital and liquidity standards, • Addressing systemically important financial institutions and resolutions, • Improving OTC derivatives markets and core financial market infrastructures, • Reforming compensation practices to support financial stability, and • Strengthening adherence to international supervisory and regulatory standards.

  4. FINANCIAL SECTOR REGULATIONS BASEL III  fully implemented by 2019 • Reduction in the frequency and severity of banking crises • Higher credit spreads or • Less credit availability Decline in Total Economic Cost of the Crises Slower Growth Long-term benefits of regulations could outweigh their short-term costs.

  5. BANKING SECTOR IN TURKEY • Despite the global crisis, Turkish banking sector continued to increase the number of branches and employees. *June 2010 figures Source: BRSA

  6. BANKING SECTOR IN TURKEY • Rapid growth in the Turkish banking sector since 2001… *June 2010 figures ** Free Capital= Shareholders’ Equity – (Non‐Financial Participations + Fixed Assets) Source: BRSA

  7. BANKING SECTOR • Capital adequacy ratio of the Turkish banking sector remained at high levels despite the global crisis. * June 2010 figures Source: BRSA,TBA

  8. BANKING SECTOR IN TURKEY / Foreign Participation • The expression of “foreign banks” here refers to those banks of which the share of foreign capital in total assets exceeds 50%. • However, there are many banks with foreign capital share less than 51%. Thus, foreign presence in Turkey actually proves to have a much more significant weight. This figure reaches nearly 40% when the foreign share in banking stocks listed at theISE is also taken into account. *Excludingparticipationanddevelopmentandinvestmentbanks **June 2010 figures Source: BRSA

  9. BANKING SECTOR / Comparison with EU • The Turkish banking system has a significant growth potential compared to EU countries. Source: Eurostat, European Banking Federation, Turkstat, BRSA

  10. BANKING SECTOR / Comparison with EU • Loans to GDP ratio reveals that the Turkish banking system has significant prospects in terms of intermediation. Source: Eurostat, European Banking Federation, Turkstat, BRSA

  11. BANKING SECTOR / Comparison with EU Source: Eurostat, European Banking Federation, Turkstat, BRSA

  12. BANKING SECTOR / Comparison with EU • The ratio of total deposits to GDP remains well below the EU average. Source: Eurostat, European Banking Federation, Turkstat, BRSA

  13. BANKING SECTOR / Comparison with EU Source: Eurostat, European Banking Federation, Turkstat, BRSA

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