A research on the ethical dimension of banking crises in the Turkish Republic of Northern Cyprus (TRNC)

Abstract

In an era of sustainable economic development models there is an increased attention on sectoral compatibility, environmental protection, and professional ethics. As in the past, the banking and finance sector is still considered to be the heart of all development models. Financial institutions such as banks provide the necessary funds for all the manufacturing or service organizations in all the sectors. Therefore stability in the finance sector is necessary for the stability in all the other sectors. Analysing the recent bank and business failures it can be seen that the business and professional ethics is one of the most important elements of stability in banking and finance industries. In this respect, the basic objective of this study is to look at the ethical issues among the reasons for the recent bank failures and outline the professional and business ethics that has to be adopted in order to provide stability in the banking and finance sector of TRNC. As the summary It can be asserted that the most serious ethical problems which led to financial crises in TRNC were, connected lending, credits without adequate collaterals, favorism by the management, inadequate use of funds, dealing in non-financial activities, political interference, lack of accountability, illegal use of funds, lack of transparency, and risky investments with low returns.