Financial crises in emerging markets

Essay from the year 2008 in the subject Business economics - Miscellaneous, grade: 1.3, Marmara University (Department of Economics), course: Seminar Paper, language: English, abstract: This paper attemps to picture the economical background of Turkey prior to the 2001 crisis, and then analyze the main characteristics of environment in which such a large scale nancial crisis could break out. The following section will rstly introduce an overview of the basic theoretical literature on nancial crises in emerging markets, as this may contribute towards a better comprehension of the economical interrelations of the theoretical framework in which the Turkish nancial crisis is embedded. Section 3, then, provides the Turkish case in detail. To familiarize the reader with the economical and political enviroment in which the crisis could occur, the rst subsection will provide a brief account of the Turkish economy prior to the crisis, special emphasis will be on the nancial liberalization proccess and the resulting changes in the banking sector. The tide of events of the crisis itself as well as its economical consequences and policy responses are part of the second and third subsection respectively. The paper will be concluded by summing up the essential causes and main characteristics of the crisis and an attempt to assign its place in the theoretical framework.