Why Turkish Securities Firms Have Not Transformed to Full Service Investment Banks?: An Assessment of the Near Future of the Turkish Securities Firms Industry

Abstract

The initiation of securities related activities in Turkey goes back to as early as 1980s. The regulation philosophy regarding securities firms is based on the creation of a new investment banking category expected to enhance economic efficiency. Although Turkish securities market experienced a boom in early 1990s, the markets were not able to improve the products and services diversity as well as the income range. Specifically, the sector, focusing on brokerage activities, stayed underdeveloped. In this article the author is questioning the reasons why Turkish securities firms have not been able to improve the range of its activities and at least some of the securities firms did not transform to full service investment banks. It is concluded that less developed economic and financial infrastructure, cash outflow to gold and real estate markets and some intra-industry conditions are the essential elements for the less development of the sector. In realistic terms, public policies or private initiatives expecting to change of this picture have decisive limitations at least in the short term.

Note: Downloadable document is in Turkish.

Keywords: Securities firm, capital markets, investment banking

JEL Classification: G24, K22, L51