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Enforcement of prudential standards in Turkish banking law

Enforcement of prudential standards in Turkish banking law Purpose – The success of banking regulations depends on their effective and efficient enforcement. Therefore, the penalties or sanctions for failures to comply with prudential regulatory requirements shall clearly be specified in the law. The aim of this paper is to describe and discuss the enforcement of prudential regulations in Turkish banking law. Design/methodology/approach – The paper explains the necessity of the prudential standards in banking regulation and their enforcement, and elaborates the Turkish Banking Act to analyze the sanctions provided for the enforcement of prudential requirements. Findings – The Turkish Banking Act comprises many of the contemporary prudential standards for banks. It also establishes an effective sanctioning regime to ensure the implementation of these standards. The sanctions in the Banking Act can be broadly classified as institutional and personal sanctions. Institutional sanctions consist of three categories: prompt corrective actions, revocation of license and closure, and financial penalties. Personal sanctions, on the other hand, comprise management overhaul and loss of job, temporary prohibition from employment in the banking sector, financial penalties, criminal liability, and civil liability of managers and controlling shareholders. Originality/value – This paper systematically analyzes enforcement of prudential standards in Turkish banking law, and aims to introduce the Turkish system to international scholars. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Money Laundering Control Emerald Publishing

Enforcement of prudential standards in Turkish banking law

Nusret Cetin
Journal of Money Laundering Control , Volume 14 (3): 12 – Jul 19, 2011
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References (7)

Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1368-5201
DOI
10.1108/13685201111147559
Publisher site
See Article on Publisher Site

Abstract

Purpose – The success of banking regulations depends on their effective and efficient enforcement. Therefore, the penalties or sanctions for failures to comply with prudential regulatory requirements shall clearly be specified in the law. The aim of this paper is to describe and discuss the enforcement of prudential regulations in Turkish banking law. Design/methodology/approach – The paper explains the necessity of the prudential standards in banking regulation and their enforcement, and elaborates the Turkish Banking Act to analyze the sanctions provided for the enforcement of prudential requirements. Findings – The Turkish Banking Act comprises many of the contemporary prudential standards for banks. It also establishes an effective sanctioning regime to ensure the implementation of these standards. The sanctions in the Banking Act can be broadly classified as institutional and personal sanctions. Institutional sanctions consist of three categories: prompt corrective actions, revocation of license and closure, and financial penalties. Personal sanctions, on the other hand, comprise management overhaul and loss of job, temporary prohibition from employment in the banking sector, financial penalties, criminal liability, and civil liability of managers and controlling shareholders. Originality/value – This paper systematically analyzes enforcement of prudential standards in Turkish banking law, and aims to introduce the Turkish system to international scholars.

Journal

Journal of Money Laundering Control – Emerald Publishing

Published: Jul 19, 2011

Keywords: Banking supervision; Prudential regulation; Law; Enforcement; Prompt corrective actions; Sanctions; Turkey

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