ABSTRACT
This chapter presents the development of the Turkish financial system by highlighting its institutional characteristics as a bank-dominated model with a three-pronged structure, comprising the Central Bank, deposit banks and the so-called special purpose banks from the Republican era until the 1980s. The financial sector subsequently tended to develop in accordance with the needs of the productive sector, as Turkish policymakers developed the financial instruments in accordance with the needs of the productive sector in the pre-1980 period. The 1923 Congress of Economics convened in Izmir on the eve of the foundation of the new Turkish Republic adopted the creation of a national economy as the basic strategy of the new stat. In 1924, what was inherited as a state bank from the Ottoman Empire would be restructured as a private corporation, and it had been authorized to function as a commercial bank, along with its historical task of providing credit to the agricultural sector.
