BY I. HUSEYIN YILDIZ
AKSAM- The countries have been taking various measures to overcome the economic recession in the entire world and trying to establish an atmosphere of confidence through packages which are announced one after the other and remove the difficulty of credit flow (liquidity) since the beginning of the global financial crisis. So could this crisis have been prevented or was it possible to forecast the risks that are faced now? The answer to this question shows that there is weakness in the regulations and/or operation of the current public control and supervision in the market economy.
Of course, the capitalist system has serious deficiencies, as required by its nature. These deficiencies even increase in complicated global financial markets which are dependent on each other, as well as in the investment banking and unregulated by-product markets. Accordingly, no matter how good is the system of control and supervision in financial markets, they can't prevent the crises alone, but decrease the possibility of crises. At this point, it's clear that there's a direct relationship between the sufficient and effective operation of the public control and supervision and the process of determining the risks.
Among the important reasons of financial crisis which started in the US and other developed countries is the failure to conduct the operations of financial markets in transparent, fair and regular markets without paying regard to long-term common good. In other words, there is the lack of public control and supervision. So the operation of regulations, practices and institutions related with the control and supervision of capital and financial markets will be reviewed and new regulations will be made. What's more important, in an atmosphere in which financial markets are integrated into each other, the control, supervision and tax regulations become global as well. The regulations aimed at comprehending them on the global level are needed in an atmosphere in which investment vehicles and the capital can move rapidly. Otherwise investors will be treated unjustly.
In parallel to this situation, the need for working with international common standards is increasing in practices of accounting and independent external audits. Moreover, the question of if the risks related with the crisis could have been predetermined will be on the agenda again. So the state's authority will intervene in practices of accounting and supervision standards and the supervision of supervisors more and supervision firms' relations with their customers will be reviewed again. It should be remembered that the majority of today's accounting and supervision institutions or regulating/controlling authorities were established following economic crises and company scandals.
It has been on Turkey's agenda for a while now to make the system of public control and supervision effective as a whole. As part of this, I can mention the draft Public Supervision Institution and the draft Turkish Trade Act which were sent to the Parliament. These efforts which were initiated in order to approximate international standards and regulations will be dealt with in higher priority in terms of the crisis in the world and its results.
But Turkey is likely to go to the extremes in the process of making certain regulations in all of these fields. We saw that it has happened before and now I'm concerned about the same. For example, there are certain regulations which can be considered exaggerated in the current Public Supervision Act and the Turkish Trade Act. Furthermore, the operation of the market mechanism shouldn't be prevented in order to increase the public's function of control and supervision. At this point, the basic aim is to make the market operate in an effective, productive, fair and transparent way, away from unfair competition in line with the long-term common good. The important thing should be ensuring the institutionalization of the market. Otherwise an inoperative market wouldn't be useful.