Banks dominate the financial system in Turkey and the asset size of the sector has increased by more than threefold in the last six years, exceeding USD 500 bn by the end of 2007. Banking and capital markets regulation and supervision have substantially improved. The capital adequacy ratio of the sector stood at in 2007, well above the EU average, and non-performing loan (NPL) ratios have fallen. FDI into the banking system has surged since 2005 and the share of total capital of the banking sector held by foreign investors is now at more than 40%. The entry of.
