The Structure of a Financial Crisis Essay -- Economics Economy Finance

The Structure of a Financial CrisisINTRODUCTIONThe course 2001 had been unlucky for turkey. unconnected from the crisis in 1994 and November 2000, the country had to face another pecuniary crisis, causing problems in the management of its economy. Why does a country delve deep into financial crisis? What are the possible immediate triggers for both the current and potential revolutionary crises? What precautions should be taken for the key issues like the fragility of the financial and banking system, previous(a) reforms and privatisation, rampant corruption, exchange rate policy? And how can the governments satisfy the markets and good deal to undertake these reforms?The current crisis has not hit the country overnight. This article figures bulge the weakness of the system, years of neglect and mismanagement, possible solutions for other developing countries. whizz has to bear in my mind that even evaluating the aftermath of the 1994 crisis, Turkey was a rising star, with a spirations towards full membership to the European Union. Among the potential applicants of EU membership, - loosely the Transition Economies of Eastern Europe- Turkey was the mere applicant with a public presentation Customs Union with the EU back in 1995. With a comparatively large and dynamic market, having high hopes for rapid economic and social progress, Turkey seemed a valuable candidate for the European Integration. Now after the 2000 November and 2001 February crises, the lessen of the economy suggests that Turkey can only catch up with the figures of year 2000, as far as the year 2004, let alone the EU membership and further growth. To indicate why such a mischance has been suffered, we have to go back to the roots of mismanagement. And that begins with the problems of Privatisation practices. THE INITIATION OF PRIVATISATIONPrivatisation has proved to be a successful method for improving institutions and maintaining corporate efficiency each(prenominal) around the wor ld. But under certain conditions either privatised firms can drum into serious difficulties or delaying the privatisation programs could trigger economic crises, together with the impact caused by years of mismanagement, not undertaking the progressive reforms and corruption - as undergo in some of the transition economies of Eastern Europe, Central Asia, Far East, and as is the case in this article, in TurkeyTHE FIRST ... ...90, January 2000, William Davidson Institute.Feldstein, Martin Refocusing the IMF, remote Affairs, March/April 1998, pp. 20-33.Harris- White, Barbara and White, Gordon (eds.), Liberalization and the New Corruption, IDS Bulletin, Vol. 27 No 2 , 1996Nas, F. Tevfik and Odekon, Mehmet (eds.) Liberalization and the Turkish Economy 1988, Greenwood Publishing Group. Rittenberg, Libby, (ed.) The Political Economy of Turkey in the Post-Soviet Era discharge West and Looking East? 1998 Praeger PublishingShaker, Sallama State, Society and Privatisation in Turkey, 197 9-1990 (Woodrow Wilson bear on Special Studies)1995 Johns Hopkins Univ. Pr.Togan, Subidey, Balasubramanyam, V.N. (Eds.) The Economy of Turkey Since Liberalization, 1996 Palgrave Publishing.Ucer, E. Murat Monetary Policy Practice in Turkey From the 1994 Crisis to the Present. October 1999, mimeo, Credit Suisse First Boston, Emerging Markets Economic ResearchVishwanath, T. and Kaufmann, D. Toward foil New Approaches and their Application to Financial Markets, The World Bank Research Observer, tidy sum 16, No.1, Spring 2001.