Enforcement of Prudential Standards in Turkish Banking Law

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. 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. The aim of this paper is to describe and discuss the enforcement of prudential regulations in Turkish banking law