Financial Institutions in Turkey — страница 3

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(Ak Bank- Ak Emeklilik), and outstanding increase in pension funds rate is also related to people trust to the turkish banking, as well as to the pension funds. Finance Companies: Financial companies acquire funds by issuing commercial paper or stocks and bond or borrowing from banks, and they use the proceeds to make loans (often for small amounts) that are particularly well suited to consume and business needs. The financial intermediation process of finance companies can be described by saying that they borrow in large amounts, but often lend in small amounts- a process quite different from that of banking institutions, which collect deposits in small amounts and often make large loans. There are three types of financial companies in Turkey: sales, consumers, and business.

1.      Sales Finance Companies are owned by a particular retailing or a manufacturing company and make loans to consumers to purchase items from that company. Sales finance companies compete directly with banks for consumer loans and are used by consumers because loans can frequently be obtained faster and more conveniently at the location where an item is purchased. 2.      Consumer Finance Companies make loans to consumers to by particular items such as furniture or home appliance, to make home improvements, or to help refinance small debts. Consumer finance companies are separate corporations, or are owned by banks. Typically, these companies make loans to consumers who can not obtain credit from other sources and charge

higher interest rates. 3.      Business Finance Companies provide specialized forms of credit to businesses by making loans and purchasing accounts receivable at a discount; this provision of credit is called factoring. Besides factoring business finance companies also specialize in leasing equipment, which they purchase and then lease to businesses for a set number of years. Mutual Funds: Mutual Funds are financial intermediaries that pool the resources of many small investors by selling them shares and using the proceeds to by securities. Through the asset transformation process of issuing shares in small denominations and buying large blocks of securities, mutual funds can take advantage of volume discounts on brokerage commissions and purchase

diversified holdings (portfolios) of securities. Mutual funds allow the small investors to obtain the benefits of lower transaction costs in purchasing securities and to take advantage of the reduction of risk by diversifying the portfolio of securities held. Many mutual funds are run by brokerage firms, but others are run by banks, or independent investment advisers. Mutual funds have seen a large increase in their market share due primarily to the booming stock market. Another source of growth was the specialization of mutual funds in dept instruments. Funds that purchase common stocks may specialize even further and invest solely in foreign securities or in specialized industries, such as energy or high technology. Funds that purchase debt instruments may specialize further in

corporate, government, or tax- exempt bonds, or in long-term or short-term securities. Mutual Funds are primarily held by households (around 80%) with the rest hold by other financial institutions and non financial businesses. Banks Depository institutions, or simply banks are the most important of all financial intermediaries and are generally the first place we go when we decide to borrow money to buy a car, or go to holiday. Bank strategy simply is collecting small deposits and making big loans, and as all economic units pursues the goal to maximize their profits. Generally banks and Turkish banks as well have four primary concerns: the first is to make sure that the bank has enough ready cash to pay its depositors when there are deposit outflows, that is, when deposits are

lost because depositors make withdrawals and demand payment. To keep enough cash on hand, the bank must engage liquidity management, the acquiring assets to meet the banks obligation to depositors. Second, the bank must pursue the acceptably low level of risk by acquiring assets that have a low rate of default and by diversifying asset holdings. The third concern is to acquire funds at low cost, and finally they must decide the amount of capital they should maintain and then acquire the needed capital. The banking sector constitutes a great part of the Turkish financial system. Many of the transactions and activities taking place in both money and capital markets are carried out by banks. Turkey’s financial system and its banking sector are virtually synonymous as a consequence