The document discusses excess liquidity conditions globally and in Turkey, as central banks have expanded their balance sheets. It notes that the US Federal Reserve, European Central Bank, and Bank of Japan are maintaining high levels of asset purchases and low interest rates. Turkey has also experienced excess liquidity as its total external debt and private sector external debt have risen. The document then focuses on the Development Bank of Turkey, its balance sheet composition concentrated in energy and manufacturing loans, and currency breakdown of loans. It addresses threats of excess liquidity drying up if central banks raise rates, as well as weaknesses like Turkey's low savings rate. Measures proposed to address issues include pension fund incentives, structural reforms, and Development Bank of Turkey increasing its paid-

1. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Adapting to Changes in Financial Systems, Policies and
Structures
CEO Forum of the World Federation of Development Finance Institutions
02-04 November 2016
Gaborone – Botswana
Dr. Oktay Küçükkiremitçi
DEVELOPMENT BANK OF TURKEY
Head of Treasury Department
1
“DFIs Sustaining Relevance in the Age of Disruption”

2. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Excess Liquidity Conditions
2
Development Bank of Turkey
WFDFI CEO Forum – 2-4 November 2016
 Balance Sheets of FED,ECB and BOJ
are at historical high levels
 ECB asset purchase programme:
Monthly purchases in public and
private sector securities amount to €80
billion on average. Policy interest rate is
still below zero.
 BOJ will continue maintaining annual
target for increasing the monetary base
at about 80 trillion yen (USD 770 billion)
annually and charging a negative
interest rate of -0.1% and introduce
QQE with yield curve control.
US
ECB
BoJ

3. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Turkey- in excess liquidty period
3
Development Bank of Turkey
WFDFI CEO Forum – 2-4 November 2016
0
50
100
150
200
250
300
350
400
450
2008Q1
2008Q2
2008Q3
2008Q4
2009Q1
2009Q2
2009Q3
2009Q4
2010Q1
2010Q2
2010Q3
2010Q4
2011Q1
2011Q2
2011Q3
2011Q4
2012Q1
2012Q2
2012Q3
2012Q4
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
2015Q3
2015Q4
2016Q1
2016Q2
Total External Debt Private Sector External Debt Bank's External Debt
B. USD Turkey's External Debt Composition
GDP
718 b USD

4. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Banking Sector in Turkey
4
Development Bank of Turkey
WFDFI CEO Forum – 2-4 November 2016
2.5
3.0
3.5
4.0
4.5
5.0
1/08
7/08
1/09
7/09
1/10
7/10
1/11
7/11
1/12
7/12
1/13
7/13
1/14
7/14
1/15
7/15
1/16
7/16
Dev.&Inv. / Banking Sector
%

5. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Balance Sheet Composition of Development Bank Of Turkey (DBT)
5
Development Bank of Turkey
WFDFI CEO Forum – 2-4 November 2016
55
19
15
9
2
Energy Manufacturing
Sectoral Breakdown of DBT Loan* (%)
*Total Loan/Total Assets ratio of DBT is 83%
83.5%
14.2%
2.3%
DBT Liabilities
Foreign Long Term Credits Equity otherEURO USD TL
56.8
36.0
7.2
Currency Breakdown of DBT Loan (%)

6. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Threat: Excess Liquidity May Dry Up
6
Development Bank of Turkey
WFDFI CEO Forum – 2-4 November 2016
 25 basis point interest rate
hike is expected in Fed’s
December 2016 meeting
 Brexit
 Geopolitical risks

7. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Weaknesses
7
Development Bank of Turkey
WFDFI CEO Forum – 2-4 November 2016
15.4
10
12
14
16
18
20
22
1990 2000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Turkey's Savings/GDP Ratio (%)

8. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Measures
8
Development Bank of Turkey
WFDFI CEO Forum – 2-4 November 2016
0
2
4
6
8
10
12
14
16
18
20
2008 2009 2010 2011 2012 2013 2014 2015 2016
Pension Fund(total) Government Incentives
 25% Government incentive for
pension funds announced at
2013 in order to increase
savings.
 Structural reform programme is
prepared to boost economic
growth especially in high end
technology aiming to decrease
current acount deficit which has
been a bottleneck in Turkish
economy for long years.
Bln USD

9. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Measures in DBT
9
Development Bank of Turkey
WFDFI CEO Forum – 2-4 November 2016
 210% Paid in Capital Increase
 Subsidized budget fund
injection
 Key position in evaluation and
crediting of high tech industry
 Key position in diminishing
regional development disparity
 Main intermediary of
implementing government
incentives

10. Development Bank of Turkey – Treasury Department
Sodev – 19 October 2016
Thanks for listening
10
Development Bank of Turkey
WFDFI CEO Forum – 2-4 November 2016