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    Logbook of the Turkish Economy: Reassuring Flow of Credit to Return to Growth

    Dalgin, Burak; Sak, Güven | April 2019
    Abstract
    Over the past decades, Turkish economic growth was fueled by availability of credit. A potential credit starvation poses a significant risk for the private sector, which has been the main beneficiary of the last decade. In order to avoid a long recovery, which is typical for recessions accompanied by debt overhangs, Turkey needs to have banks resume lending. This doesn't seem possible given the at-limit sources and unattractive profitability of the banking sector. Therefore, troubled assets on bank balance sheets need to be cleared with timely and competent action. Naturally, this could work only if accompanied with a rational, predictable and market-friendly macroeconomic framework and certain regulatory/ judiciary support. The public-private partnership approach to deal with distressed assets advocated in this paper would (i) support private sector (employment, commercial capacity, value chains around certain firms) while improving its competitiveness (elimination of zombies, creating at scale firms); (ii) enable banking system to resume lending thanks to released capital; (iii) use taxpayer funds effectively through an independent, transparent and performance-oriented vehicle; (iv) mobilize foreign funding resources; and (v) send a strong positive signal to the broader market. Enough experience on distressed asset relief programs has been accumulated by EBRD and IFC in the aftermath of the global crisis.
    Citation
    Dalgin, Burak; Sak, Güven. 2019. Logbook of the Turkish Economy: Reassuring Flow of Credit to Return to Growth. © Economic Policy Research Foundation of Turkey. http://hdl.handle.net/11540/10016.
    Keywords
    Economic Development
    Economic Infrastructure
    Economic Policies
    Regional Economic Development
    Microfinance Programs
    Public Finance
    Local Financing
    Financial Stability
    Financial Sector Regulation
    Public Financial Management
    Financial System
    Financial Statistics
    Foreign and Domestic Financing
    Financial Inclusion
    Enterprises
    Financial aid
    Economies in transition
    Local Finance
    Local Government
    Insurance Companies
    Banks
    Social Equity
    Pension Funds
    Mutual Funds
    Financial Aspects
    Fiscal Policy
    Social responsibility of business
    Accounting
    Personal budgets
    Cost and standard of living
    Bank accounts
    Credit control
    Regulatory reform
    Banks and banking
    Digital Financial Service
    Pension plans
    Individual retirement accounts
    Employee pension trusts
    Investment management
    Investments
    Multiemployer pension plans
    Keogh plans
    Individual retirement accounts
    Pension plans
    Employee pension trusts
    Pension trusts
    Investment companies
    International banks and banking
    Stock exchanges
    Show allCollapse
    Citable URI
    http://hdl.handle.net/11540/10016
    Metadata
    Show full item record
    Thumbnail
    1554476215-6.LOGBOOK_of_the_TURKISH_ECONOMY___Second_Log.pdf (1.002Mb)
    Author
    Dalgin, Burak
    Sak, Güven
    Theme
    Economics
    Finance
     
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise