Abstract

The most typical feature of financial crises is that the money demand of almost all economic units increases and they wish to keep their properties as cash that is the most liquid asset. This is caused by the loss of confidence between economic units. In the 2008 Financial Crisis, this feature has come into prominence and a shortage of liquidity and credit that affected all countries has appeared. Avoiding the negative effects of the financial crisis is only possible through a good liquidity management. Central banks of the USA, Europe and other developed and developing countries have taken several measures in order to solve the shortage of liquidity. The Central Bank of the Republic of Turkey (CBRT) has also made some regulations in the financial crisis. The aim of this study is to investigate the essential dynamics of the 2008 Financial Crisis and evaluate the liquidity management that the CBRT has followed against the financial crisis.

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