At present, the Turkish banking sector has up-to-date technology and is equipped with highly qualified personnel to compete in the international arena. The result is a more transparent and well-functioning banking sector whose players have been progressively modernizing their operations in line with the developments in the global banking community. There is a significant growth potential in the Turkish banking sector. Banks will have to compete in an increasingly challenging environment. In the coming years, strategically and technically well-positioned banks will be able to utilize the growth potential of the sector. However, increasing competition and squeezed profit margins are expected to force banks to be more cost conscious. In order to increase profitability and efficiency, mergers and strategic alliances with foreign banks will be on the agenda of the sector. The integration process with the EU will bring new challenges for Turkish banks to increase their efficiency and quality of their services by improving their distribution channels. Additionally, increasing compliance with the internationally accepted standards and other structural changes made in line with the integration process with the European Union will attract foreign banks, which in turn will intensify the competition in the sector. Another significant step taken by Turkish authorities was the introduction of the recent disinflation program and the other restructuring efforts. Turkey has suffered from chronically high inflation for years and our economy is the last high-inflation economy among the OECD countries. High level of public deficits and fiscal imbalances, together with self-fulfilling inflationary expectations are the main causes of the inflation process.

These measures are oriented toward promoting the activity, so that you will not wait for the client to ask for the government papers but search and find this client yourself. And the very first step you should make in this direction is: abandon the traditional pension fund security portfolio classification as “hold to maturity”. In other words, this implies the necessity for more flexibility, more diversification and for the existence of efficient risk management structures. A constant concern, which I want to pay particular attention and get your highest interest on it, is the professional development of human skills. I am not making any prejudice about the human resources that are currently working at the banking system, but I would like to point out that the mobilization of capable human resources, devoted to and shaped professionally is vital for the accomplishment of success. To be more competitive and bring new developments, we have to constantly upgrade the skills of each employee at all levels. It is true that the majority of the banks of our banking system represent international well experienced banking groups. However, I would like to emphasize that there is still room for more expertise and qualified human resources, so that the best practices of the international markets are infiltrated in our banking system. In addition, within the framework of this association, I would advocate that the Dealers Association must very soon come up with a Code of Conduct, agreed by all its members.