Global Financial Crisis: Economic Austerity Measures Of Turkey

The global financial crisis has been the worst financial crisis since the one related to the Great Depression of the 1930s. It contributed to widespread business contraction, increases in unemployment, shrinking government revenues, declines in consumer wealth, and so a significant decline in economic activity. Many causes have been cited about the global financial crisis by leading economists and experts. Both market-based and regulatory solutions have been presented to lessen the dramatic effects of the crisis. The collapse of a housing bubble, which peaked in the United States in 2006, erupted in 2007 and led to a global financial crisis in 2008. This crisis has been triggered by a dramatic rise in mortgage delinquencies and foreclosures in the U.S. and has caused the values of securities tied to housing prices. So it has damaged financial institutions all over the world. The financial crisis which began in industrialized countries quickly spread to emerging and developing economies. Questions about bank liquidity, declines in credit availability, and damaged investor confidence had a negative impact on global markets, and caused large losses during 2008. This global crisis also affected Turkey. But the effects of this crisis on Turkey were limited. Demand in global and national markets has decreased. So the trade level in both national and global markets has also decreased. Bank‘s liquidity and profitability seemed healthy during such a crucial crisis. There were several policies of Turkish Government to diminish the effects of financial crisis about interest rates, tax rates, exports rediscount credit limit etc. This study aims to analyze the effects of the global financial crisis and the measures taken by Turkey to lessen the negative effects of it on Turkish economy