179 10 3494 https://omeka.ibu.edu.ba/files/original/6ed881a618f137c075489e2b71ae8925.pdf 9a1001ed8d830ec2683d3555c36c0433 PDF Text Text 2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Managerial and Supervisory Mistakes Leading to Foreseeable Consequence: Global Financial Crisis Niyazi KURNAZ Dumlupinar University- School of Applied Sciences Department of Accounting, Central Campus / Kütahya, Turkey nkurnaz@dumlupinar.edu.tr Hanife TOPAL Instructor, Dumlupinar University-TavĢanlı Vocational Higher School TavĢanlı / Kütahya/Turkey hanifetopal@dumlupinar.edu.tr Mustafa KAYIK Instructor, Dumlupinar University-TavĢanlı Vocational Higher School TavĢanlı / Kütahya/Turkey mkayik@gmail.com Harika ÖZKAN Instructor, Dumlupinar University-Tavşanlı Vocational Higher School Tavşanlı / Kütahya/Turkey harika_ozkan@hotmail.com Abstract: The global financial crisis that began in summer 2007, deepened in 2008 and looks set to run for some time and to have profound effects on the global economy. For the 2007 subprime crisis, we consider that there are also some particular aspects which characterize the actual crisis, like the increased role of financial innovations (the securitization and credit derivatives) and a very important contagion phenomenon which began within the American economy and spread over the global financial markets. The subprime crisis extended at international level, following four main directions: at the root of the crisis lies a fundamental inconsistency between financial globalization – the process of liberalization and deregulation driving the impressive growth of world financial markets – and existing public rules and policies at both domestic and international levels. On the other hand; complex corporate structures managing financial innovation causing excessive risk taking and excessive leverage due to lack of adequate supervision enhanced the global disease. In this paper after discussing the causes of the global financial crisis, we will put forward ways and policies to overcome the ongoing crisis in global level. Keywords: Global financial crisis, financial innovation, financial deregulation, financial liberalization, corporate governance Introduction We have heard the footsteps of coming financial crisis in 2007. The crisis was the consequence of complex interactions between a range of factors. The development of the crisis is quite aptly put in The Economist of April 3rd 2008: First there was disbelief and denial. Then fear. Now comes anger... (Eijffinger, 2008) The anger is of course caused by the failure of financial supervision, which will be scrutinized in detail further in this paper. The onset of the crisis in 2007 followed an extended period of unusually low real interest rates, easy credit conditions, low volatility in financial markets and widespread increases in asset prices that had generated large-scale but hidden vulnerabilities. When these vulnerabilities crystallised in the wake of repeated series of asset write-downs, key financial markets became dysfunctional and the solvency of large parts of the global banking system was challenged 32 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo (BIS, 79th Annual Report, 2009). In 2007 the depressed period has began in a local mortgage segment in financial markets in the US but it spread all over the world in surprisingly short period of time causing general economic recessions in developed nations as well as developing countries. The proximate cause of the crisis is reasonably well understood. It began with the subprime mortgage crisis in the U.S. Sub-prime lending, that is, mortgages given to borrowers who do not meet the credit standard cut-off for government-sponsored enterprises, rose steadily from just below $100 billion in 1996 to around $600 billion in 2006. In 2006, sub-prime lending constituted a whopping 22% of all mortgages issued in the U.S. As was to be expected, this resulted in a rise in the default rates among home loan borrowers, first noted in February 2007 and fully evident by August that year. As this happened and more homes came on the market, prices of homes began to fall. From mid-2006 to mid-2008 house prices in the U.S. fell at the rate of 10% per annum. This in turn meant that lending banks and financial institutions found their asset position weakening, since the values of the foreclosed homes were now less than when the mortgages were signed. Soon these institutions were, in turn, defaulting on their loans. As this fear spread, inter-bank and inter-corporate lending came to a virtual standstill (Basu, 2009, p. 3). This argument may be seen acceptable for most of the people but we should understand how a problematic that occurs in a small part of the market pushes the world‘s financial markets into a vicious circle. The shock on the American real estate market has been a starting point for the financial turbulences at international scale. At the end of 2006, an important number of clues have already announced the international financial markets crisis: depreciation of dollar denominated assets, degradation of banks financial indicators, reserves reduction and mortgage credit problems. Between 1997 and 2006, the houses prices increased with about 124% in the United States. The financial turbulences have begun before the subprime crisis. A first contagion phenomenon related to stock prices drop was signaled in emerging markets in May 2006. A second event of financial turbulences was represented by the Chinese capital market disorder in February 2007. The credit mortgage crisis in the United Stated followed (Albulescu, 2008). This financial crisis which began in industrialized countries quickly spread to emerging market and developing economies. Investors pulled capital from countries, even those with small levels of perceived risk, and caused values of stocks and domestic currencies to plunge. Also, slumping exports and commodity prices have added to the woes and pushed economies world wide either into recession or into a period of slower economic growth (Nanto, 2009). And yet many vulnerabilities were manifest from 2004–2006 in the UK and USA in ways that clearly showed inter-connections (Gills, 2008; Pettifor, 2006). Absolute levels of debt were rising and leverage levels were rising making debt servicing more interest rate sensitive. House prices were rising faster than incomes. The expansionary business models of some banks were increasingly dependent on the renewal of short term debt in wholesale markets. Investment banks and treasury arms of commercial banks were increasingly engaging in proprietary trading. Their role as prime brokers was expanding intra-financial multiplication and fuelling further securitisation and the creation of structured credit products. Speculative investment through other derivatives that were originally intended as insurance (credit default swaps, blended foreign exchange futures etc.) was creating a highly unstable asset class. These were all issues that made tenable the notion that the ongoing dynamics of the financial system were leading to collective qualitative changes. (Morgan, 2009) In summary, there are three basic and important specifications of the crisis. The first and the second reason point out excessive risk-taking and excessive leverage by financial institutions. These reflected an inconsistency between globalization and market governance that created the possibility of originating and trading assets under massive underestimation of their risk characteristics. It is the third feature however that sharply differentiates this from previous crises: the extreme level of opacity regarding the size and incidence of risks in the portfolios held by investors and intermediaries (EEAG Report, 2009). Several layers of securitization of loans and mortgages resulted in a loss of information and created network externalities across interconnected institutions, which made intermediaries and investors increasingly unable to assess how much risk was in their portfolio, eventually causing the illiquidity of markets directly or indirectly exposed to asset backed securities.( EEAG Report, 2009) From another point of view, the belief that markets tend towards equilibrium is directly responsible for the current turmoil; it encouraged the regulators to abandon their responsibility and rely on the market mechanism to correct its own excesses. The idea that prices, although they may take random walks, tend to revert to the mean served as the guiding principle for the synthetic financial instruments and investment practices which are currently unraveling (Soros, 2008, p.97). In addition, Soros argued that the actual source of the current crisis is the asymmetric structure of financial internationalization and financial liberalization. In this article, we will review the origins of the current global financial crisis. Within this framework it reviews recent developments in global financial atmosphere causing distortion and distrust in financial environment worldwide. In what follows, we therefore attempt to locate the origins of the crisis through two main grouping of 33 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo axis: first financial liberalization, competition, excessive risk taking and excessive leverage and second financial innovation, complex corporate structures and lack of adequate supervision. Financial Liberalization, Competition, Excessive Risk Taking and Excessive Leverage It is not surprising that analysts and observers of the financial markets have brought Minsky‘s ideas back from an almost total intellectual exile. The conditions that caused and then helped to develop the current financial crisis in the USA correspond very neatly to Minsky‘s model of financial crises. This cyclical pattern is the endogenous nature of agents‘ risk perception and expectations. The Minskyan cycle can be described as follows. The tranquillity of states of full-employment gradually leads to a diminishing perception of risks and increasingly optimistic expectations about the future. It is also during periods of tranquil expansion that ‗profit-seeking financial institutions invent and reinvent ‗‗new‘‘ forms of money, substitutes for money in portfolios, and financing techniques for various types of activity‘. As financial innovation and optimistic expectations develop, additional demand for goods and assets is created. Asset prices increase, giving rise to additional profit opportunities and thus attracting new investors. This positive feedback characterises the booming phase of the cycle, in which the greater appetite for risk and new financial instruments make the system increasingly fragile. At some point, some event calls agents‘ attention to the high degree of exposure to risk in the system and a phase of financial distress begins (Minsky, 1986, p.199) In its Annual Report for 2006–7 released in June 2007 (technically not an Financial Stability Report, but covering financial stability concerns as part of its remit), the BIS noted that an ―ever increasing number of economic and financial variables have been observed to deviate significantly from what might be deemed traditional norms‖ which might not be sustainable. They highlighted that the world seems ―awash with liquidity‖ with mortgage credit available on unprecedented terms. Low risk free rates and intense competition were seen as underlying a high appetite for risk, but also the misperception of risk due to lack of due diligence in the originate and distribute model – related in turn to principal-agent problems. Concerns were expressed about ―irrational exuberance‖ and risk of overpricing assets, that might turn to undershooting of prices, if liquidity dries up and correlations of asset prices rise as has been seen ―many times in the past‖(Davis, Karim, 2008). As stated very precisely by Jack Boorman (2009), these trends were further complicated by an increasingly integrated global trading and financial system which magnified and accelerated the transmission process; inadequate regulation and supervision of national financial systems and fragmentation of global regulation; weak surveillance by the IMF and other multilateral organisations; and aggravated by weak and uncoordinated policy responses to the initial signs of trouble in the financial system—responses that, as noted subsequently, in many instances did more to shake confidence than to instill a sense that policy was up to the task of dealing with the banking system crisis and the impact on the real economy (Boorman, 2009). Simultaneously, now powerful financial interests pushed for the deregulation and liberalization of world financial markets. This resulted in intensified financial competition over increased household and firm demand for credit that, in turn, fed a wave of financial innovation (from junk bonds, securitization, collateralized debt obligations to credit default swaps). In Minskian fashion, these developments allowed under-consumption to be temporarily averted and furthered over-investment tendencies that spread to developing economies. Continued macroeconomic growth became dependent on a financially fragile debt structure and on consumption propped up by wealth effects induced by asset bubbles. The bubbles were internally generated by increases in endogenous credit facilitated by financial innovation. These bubbles were allowed to persist by competition-induced decreases in inflation that allowed monetary authorities to pursue lower interest rate policies (Goldstein, 2009). Minsky (1987) was one of the few commentators who understood the true potential of securitization. In principle, all mortgages (indeed, most bank assets) could be packaged into a variety of risk classes, with differential pricing to cover risk. Investors could choose the desired risk-return trade-off. Financial institutions would earn fee income for loan origination, for assessing risk, and for servicing the mortgages. Wall Street would place the collateralized debt obligations (CDOs), slicing and dicing to suit the needs of investors. Securitization contributed to an apparent democratization of access to credit as homeownership rates rose to record levels over the coming decades—and it initially appeared that banks and thrifts were insulated from interest rate risk. Minsky (1987) argued that securitization reflected two additional developments. First, it was part and parcel of the globalization of finance, as securitization creates assets freed from national boundaries. As Minsky was fond of pointing out, the unparalleled post-WWII depression-free expansion in the developed world (and even in much of the developing world) has created a global pool of managed money seeking returns. Packaged securities were appealing for global investors trying to achieve the desired proportion of dollardenominated assets. It would be no surprise to Minsky to find that the value of securitized American mortgages 34 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo eventually exceeded the value of the global market for federal government debt. The second development is the relative decline of the importance of banks in favor of ―markets.‖ (The bank share of all financial assets fell from around 50% in the 1950s to around 25% in the 1990s.) This was encouraged by the experiment in Monetarism (that decimated the regulated portion of the sector in favor of the relatively unregulated ―markets‖), but it was also by continual erosion of the portion of the financial sphere that had been allocated by rules, regulations, and tradition to banks. The growth of competition on both sides of banking business—checkable deposits at nonblank financial institutions that could pay market interest rates; and rise of the commercial paper market that allowed firms to bypass commercial banks—squeezed the profitability of banking. Minsky (1987) observed that banks appear to require a spread of about 450 basis points between interest rates earned on assets less that paid on liabilities. This covers the normal rate of return on capital, plus the required reserve ―tax‖ imposed on banks (reserves are non-earning assets), and the costs of servicing customers. By contrast, financial markets can operate with much lower spreads precisely because they are exempt from required reserve ratios, regulated capital requirements, and much of the costs of relationship banking. To restore profitability in the aftermath of Monetarism, banks and thrifts would earn fee income for loan origination, but by moving the mortgages off their books they could escape reserve and capital requirements. Investment banks purchased and pooled mortgages, then sold securities to investors. As Minsky (1987) argued, investment banks would pay ratings agencies to bless the securities, and hire economists to develop models to demonstrate that interest earnings would more than compensate for risks. Risk raters and economic modelers essentially served as credit enhancers, certifying that prospective defaults on subprimes would be little different from those on conventional mortgages—so that the subprime-backed securities could receive the investment-grade rating required by insurance and pension funds. Later, other ―credit enhancements‖ were added to the securities, such as large penalties for early payment and buy-back guarantees in the event of capital losses due to unexpectedly high delinquencies and foreclosures—the latter became important when the crisis hit because the risks came right back to banks due to the guarantees. But an additional advantage to the banks of all this lay in the regulatory arbitrage that the collateralised debt obligations provided. Banks were able to expand leverage [the relationship of their assets (the amount lent out) to their equity or capital] in ways that were previously impossible. This expansion of leverage was a significant factor in allowing the investment banks and others to achieve greater pricing power in their trading activities, underpinning their bubble-inducing activities. Clearly, any holding of capital is costly to the banks in the sense that it cannot be lent out at an interest. Yet over the recent past the creation of asset-backed securities of the form discussed above allowed the banks to increase their leverage substantially (Lawson, 2009). Commercial banks appeared to be adequately capitalised, but only because they overestimated the value of on-balance-sheet assets while holding a high percentage of their most vulnerable assets hidden off-balance-sheet. In fact, they were excessively leveraged, as the crisis revealed. Many European banks had leverage ratios of 50 or more before the crisis (Crotty, 2009) One particular dimension of the housing bubble were the subprime loans which were repackaged by the finance sector as particular mortgage-backed securities (MBS) and collaterized debt obligations (CDOs)—ostensibly to better manage risk. Thus excess liquidity was channelled both directly into the purchase of increasingly complex financial instruments (including derivative products) and indirectly by allowing the funding of subprime mortgages which were then repackaged as MBSs and CDOs. When the housing bubble burst it became apparent that the value of MBSs and CDOs had not been accurately reflected on banks‘ balance sheets. Financial instruments had become so complicated that where risk lies had become obscured. When the subprime mortgage market collapsed there was widespread contagion into the global financial system as a whole, as a result of the global distribution of the complex financial instruments and derivative products amongst the globally interconnected financial firms. The ‗toxic‘ combination of an asset price bubble and the way the risks were passed on into the system has been key to making these financial instruments into such financial weapons of mass destruction (O‘Brien, Keith, 2009). When losses on subprimes began to exceed expectations based on historical experience, prices of securities began to fall. Problems spread to other markets, including money market mutual funds and commercial paper markets, and banks became reluctant to lend even for short periods. With big leverage ratios, money managers faced huge losses greatly exceeding their capital, and began to de-leverage by selling, putting more downward pressure on prices. As the subprime market unraveled, fears spread to other asset-backed securities, including commercial real estate loans, and to other bond markets such as that for municipal bonds. Markets recognized that there were systemic problems with the credit ratings assigned by the credit ratings agencies. Further, they realized that if mortgage-backed securities, other asset-backed securities, and muni bonds are riskier than previously believed, then the insurers will have greater than expected losses. Ratings agencies downgraded the credit ratings of the insurers. As the financial position of insurers was questioned, the insurance that guaranteed the assets became worthless—so the 35 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo ratings on bonds and securities were downgraded. In many cases, investment banks had a piece of this action, holding the worst of the securities, and they had promised to take back mortgages or had positions in the insurers—in retrospect, a huge mistake. (Wray, 2009) Financial Innovation, Complex Corporate Structures and Lack of Adequate Supervision Although the visible start of the global financial crises emerged from US subprime market, its deep cause on the financial side is to be found in the flawed institutions and practices of the current financial regime, often referred to as the New Financial Architecture (NFA). ‗New Financial Architecture‘ refers to the integration of modern day financial markets with the era‘s light government regulation. The NFA is based on light regulation of commercial banks, even lighter regulation of investment banks and little, if any, regulation of the ‗shadow banking system‘—hedge and private equity funds and bank-created Special Investment Vehicles (SIVs). Support for lax regulation was reinforced by the central claim of neoclassical financial economics that capital markets price securities correctly with respect to expected risk and return. Reregulation of financial markets will not be effective unless it substantially reduces the perverse incentives that pervade the system. Financial innovation has proceeded to the point where important structured financial products are so complex that they are inherently non-transparent. They cannot be priced correctly, are not sold on markets and are illiquid. According to the Securities Industry and Financial Markets Association (SIFMA), there was $7.4 trillion worth of Mortgage Backed Securities (MBSs) outstanding in the first quarter of 2008, more than double the amount outstanding in 2001. Over $500 billion dollars in Colletarized Debt Obligation (CDOs)1 were issued in both 2006 and 2007, up from $157 billion as recently as 2004 (SIFMA website). The explosion of these securities created large profits at giant financial institutions, but also destroyed the transparency necessary for any semblance of market efficiency. Deregulation allowed financial conglomerates to become so large and complex that neither insiders nor outsiders could accurately evaluate their risk. The Bank for International Settlement told national regulators to allow banks to evaluate their own risk—and thus set their own capital requirements—through a statistical exercise based on historical data called Value at Risk (VAR). Government officials thus ceded to banks, as they had to ratings agencies, crucial aspects of regulatory power (Crotty, 2009) The surge in non-prime mortgage loans was spurred by the confidence of originating banks in their ability to measure default risk accurately by employing standard quantitative models. The risk associated with these underlying securities was subsequently transferred to market investors in the form of residential mortgage-backed securities (RMBS) and their common derivatives such as collateralized debt obligations (CDOs). These complex financial instruments have been differentiated by their riskiness and sold to market investors. They have allowed investors to choose assets with a precise risk profile (Orlowski, 2008, p.11). But the most important factors which contributed to the crisis appearance were the financial innovations (represented by the securitization activity and the credit derivatives), combined with the imperfections of the regulatory and surveillance activities (Albulescu, 2008). Leverage can therefore constitute an effective long-term strategy to increase the value of a portfolio, since it basically entails getting loans with the hope that investment returns will be higher than borrowing costs. But if the economic return on investment is lower than borrowing costs, leverage becomes harmful. It then creates a snowball effect on the balance sheet. In the final analysis and simply put, leveraging is a risk transfer instrument; it is a sword of Damocles with the potential to hurt the risk-taking firm. In the event of bad investment, corporate equity, which normally acts like a safety feature for most firms, becomes useless. In such situations, the only way out is either a buyout by another firm in better financial standing or government intervention or bankruptcy. When used excessively, leveraging can threaten, via domino effect, the stability of a whole sector or industry. That is what happened on Wall Street in September 2008 when Lehman Brothers went bankrupt. Many investors had engaged in leveraging with the goal of boosting rapidly the growth rate of their portfolios. The inaction of regulation agencies and independent rating agencies—that had yielded to the illusions of the effectiveness of monetary policy— 1 In their abbreviated definition, CDOs are structured credit products backed by pools of other assets, with cash flows assigned to varying credit risk tranches: senior AAA-rated, mezzanine AA to BB- rated, and equity (unrated) tranche. Cash flows are going first to the lowest risk tranche. In Exchange for purchasing CDOs, third-party investors receive a claim on the mortgage asset and related cash flows, which becomes collateral in the case of default. Forms of CDOs include: a cash flow CDO where underlying credit risks are bonds or loans held by the issuer, a synthetic CDO with the exposure to risk insured by the credit default swap (CDS), and CDOs-squared where each underlying risk is itself a CDO tranche. 36 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo encouraged the spectacular development of new, complex and minimally regulated financial products. The intensive recourse to increasingly sophisticated innovations as well as the dissemination of financial instruments which with time became incomprehensible to users – including workers of the regulation and rating agencies - cost the international financial system what was supposed to be its most important or precious asset: transparency (Monga, 2009, p.13). Looking at the causes of the global crisis from supervisory and regulatory perspectives, The Basel Committee itself has already indicated, through its Chairman Nout Wellink, that a thorough revision of the risk management and capital adequacy regulations is needed. The Basel committee already proposed raising capital requirements for complex structured credit products, liquidity facilities to support asset-backed commercial paper conduits and credit exposures held due to trading. Additionally, the committee said that standards for liquidity management needed to be strengthened. Another problem about the causes of the crisis is the procyclicality of the capital requirements, which has to be addressed by the Basel Committee. It is evident that the capital requirements should become more anti-cyclical. The risk management models based on Basel II have not passed the stress test of the credit crisis. This was to be expected, as ex post risk (certainly in times of crisis) is not a good proxy for ex ante uncertainty. Several researchers have additionally proposed improvements for risk management and capital planning to make banks more resilient to crises. It has become clear that national central banks and financial supervisors have to be much more involved with risk management in financial institutions. We have seen that CEOs do not understand the risk management models and aim for higher yields and the risks connected to those yields. Regulators have to provide incentives for banks to take into account risks better when searching for higher yields. This does not necessarily have to come from more strict supervision. Because of their strategic interaction with financial institutions, supervisors should use modern game-theoretic concepts like constructive ambiguity and incentive compatibility to realise smarter and more efficient supervision. The credit crisis has showed us that the American system of financial supervision has failed and that the European supervision of banks and insurers also needs significant improvement (Eijffinger, 2008). At the most basic level, the subprime crisis resulted from the tendency of financial normalization and innovation to run ahead of financial regulation. For a long time, deregulation was the order of the day not only outside but also within financial markets, as illustrated by, for example, eliminating the Glass-Steagall Act‘s2 restrictions on mixing investment and commercial banking. However, considering what had happened, the problem was that other (regulatory) policies were not adapted to the new environment (Schneider, Kirchgässner, 2009) In the developed world there has been a long-term transition away from relatively tightly regulated banking toward ―market-based‖ financial institutions. This transformation is most clear in the U.S., which had separated commercial banking (loans and deposits) from investment banking (broader array of financial instruments including equities and securities). Two decades ago there was a lot of discussion of the benefits of the ―universal banking‖ model adopted abroad (Germany, Japan), and there was some movement in the U.S. in that direction. However, of far greater importance was the development of the ―originate to distribute‖ model best represented by securitization, and use of ―off-balance sheet‖ operations. Ironically, the push to increase safety and soundness through creation of international standards as adopted in the Basle agreements actually encouraged these developments—which as we now know greatly increased systemic risk. The failure of private parties to exercise sufficient due diligence was rooted in the failure of government supervisors to challenge decisions made by private accountants and credit-rating organizations. Authorities neglected their duty of examining and publicizing the implications that these decisions might have for safety-net loss exposure. By tolerating a decline in transparency, supervisors made it difficult to recognize and price the risk expansion not only for themselves, but also for the market participants (Caprio, Demirgüç-Kunt and Kane, 2008). The current crisis just as convincingly represents a failure of the Big Government/Neoconservative (or, outside the U.S., what is called neo-liberal) model that promotes deregulation, reduced supervision and oversight, privatization, and consolidation of market power. It replaced the New Deal reforms with self-supervision of markets, with greater reliance on ―personal responsibility‖ as safety nets were shredded, and with monetary and fiscal policy 2 The Banking Act of 1933 was a law that established the Federal Deposit Insurance Corporation (FDIC) in the United States and introduced banking reforms, some of which were designed to control speculation[1]. It is most commonly known as the Glass– Steagall Act, after its legislative sponsors, Carter Glass and Henry B. Steagall. The first Glass-Steagall Act of 1932 was enacted in an effort to stop deflation, and expanded the Federal Reserve's ability to offer rediscounts on more types of assets, such as government bonds as well as commercial paper[4]. The second Glass–Steagall Act (the Banking Act of 1933) was a reaction to the collapse of a large portion of the American commercial banking system in early 1933. It introduced the separation of bank types according to their business (commercial and investment banking), and it founded the Federal Deposit Insurance Corporation for insuring bank deposits. Literature in economics usually refers to this latter act simply as the Glass–Steagall Act, since it had a stronger impact on US banking regulation. (www.wikipedia.org) 37 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo that is biased against maintenance of full employment and adequate growth to generate rising living standards for most Americans (Wray, 2009). One important implication of the recent crisis is the wide-spread calls for reforms of regulation and supervision. The initial reaction to the emerging crisis was one of disbelief: how could the crisis emerge in countries whose supervision of credit risk had been thought to be the best in the world? Indeed, the regulatory standards and protocols of these countries were in the process of being emulated worldwide through the international Basel capital accords. Basel II – which is currently in its implementation stage - grew out of concern that the Basel I accord was unable to address the range of risks in bank activities, as evidenced by the growth of securitization. Basel II is built on three Pillars: (1) minimum regulatory capital requirements for credit risk, operational risk and market risk; (2) the supervisory review process; and (3) market discipline and disclosure. The minimum capital requirements are determined by either external ratings from ratings agencies for smaller banks or by outputs from the larger banks‘ own internal ratings models. Many interpreted the crisis as a vivid example of market failure, evidence that there is no such thing as market discipline, reinforcing calls for stronger regulations through improvements in Basel II accord. But the crisis also spawned a growing argument about the role Basel I accord may have played in causing the crisis. Indeed, it is no secret that Basel I contributed to the growth in securitization by assigning lower capital charges and thus giving incentives to institutions to move their assets into off balance- sheet securitization vehicles. While advocates claimed that Basel II, had it been implemented earlier, could have lessened or prevented the turmoil, critics of the Basel approach to capital regulation pointed out that the crisis has simply reconfirmed fundamental flaws that have been evident in this approach (Demirgüç-Kunt, Servén, 2009, p.25). Possible solutions to overcome the worldwide distress After leaving out the first shock, countries started to search about possible ways to overcome the crisis with least damage and the least cost in the shortest period of time possible. Though fundamental precautions needs to be taken worldwide, nations and authorities have started the job by listing the lessons learned from the crisis and by putting forward relative actions according to problematic areas and issues in financial environment along with the whole economy as well. In the United States, policy proposals to change specific regulations as well as the structure of regulation and supervision at both the domestic and international levels have been coming forth through the legislative process, from the Administration, and from recommendations by international organizations such as the IMF, Bank for International Settlements, and Financial Stability Board (Forum) (Nanto, 2009). Though remedies prepared by countries differs according to every nation due to different focus over the problems and different national financial structures and different needs, fundamentally policies commonly aim to promote robust supervision and regulation of financial firms, establish comprehensive supervision of financial markets, protect consumers and investors from financial abuse, provide the government with the tools it needs to manage financial crises, and to raise international regulatory standards and improve international cooperation. In addition, U.S. authorities proposed international reforms to support U.S. efforts- where policy work is the most intense as the starting point of the crisis and as the most affected country of the crisis, including strengthening the capital framework; improving oversight of global financial markets; coordinating supervision of internationally active firms; and enhancing crisis management tools. As the crisis unfolded, governments have been forced into the role of becoming new owners of distressed financial institutions, guarantors of loans, taking over the risk implicit in poor collateral (with contingent liabilities for the taxpayer), and making regulatory adjustments on the run. With respect to crisis management there are three basic and separable steps required to deal with a banking system solvency crisis. Guarantee liabilities to stop bank runs. All deposits need to be covered to avoid creating runs between covered and noncovered institutions. Secondly, separate the good assets from the bad assets, and get the bad assets off bank balance sheets. One approach to this is like the Troubled Asset Relief Program (TARP) program in its initial form: essentially an ‗asset management‘ approach to buying toxic assets (as was used during the Asia crisis). Thirdly, recapitalize the asset-cleansed banks by finding new equity holders. This can be via selling common shares or preference shares (that provide a higher yield to the owner) to private entities or the government. The latter is not desirable in the longer run, as it can contribute to moral hazard issues and level playing field issues. As the crisis passes, it will be important to focus on sustainable policies for the financial system (Blundell-Wignall, Atkinson and Lee, 2008). Most important, according to Ergungor and Thomson, is that successful crisis resolutions have been characterized by transparency. When officials move to contain a financial crisis, their primary task is to identify which institutions are viable and which assets are good, and conversely which institutions are insolvent and which assets are bad. This triage and full disclosure of associated losses clears the uncertainty surrounding the 38 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo financial institutions and makes it possible for the viable institutions to raise new funds from private investors or from the government if private sources are not available. Second, crisis resolutions have been most successful when they were handled by a politically and financially independent agency. Granting independence to those responsible for containing the crisis and restructuring shields decision makers from political pressures, which mount as institutions are closed and assets are liquidated. The decision to close a financial institution or a business must be an economic, not a political, one. Financial independence is necessary to give credibility to political independence: If a government agency holds the purse strings, it can dictate policy. Independence from changing political environments is also important because it allows for a rapid response to emergent funding needs (as when new losses are discovered in a financial institution). Having to wait for the legislature to appropriate funds in these situations can be impractical. A third practice associated with a successful resolution strategy is the maintenance of market discipline. Without it, note Ergungor and Thomson, the stage is set for future crises. If market discipline is to be effective, investors who assumed greater risks must be credibly exposed to loss; that is, they must suffer the consequences of having ignored or failed to detect signs of trouble. Finally, Ergungor and Thomson observe that containing troubled financial assets and restructuring institutions has typically not been enough to resolve a financial crisis entirely, though doing so positions the system to return to more normal functioning. They find that full crisis resolution must also achieve some restoration of credit flows within the economy. For that to happen, the creditworthiness of borrowers must be restored throughout the economy—a difficult task, given that the economic fallout from a crisis (such as rising unemployment) actually erodes credit quality further. (Ergungor, 2007; Ergungor and Thomson, 2005; Ergungor and Cherny, 2009) Conclusion The subprime mortgage crisis that erupted in the American financial markets in August 2007 caused an unprecedented global recession and generated various and urgent policy responses around the world. It was seen as an opportunity for some communist economists to announce the end of the dominance of free market economy. It was, however, a matter of concern to hear some important people complain about the ―betrayal of globalization‖-who have by and large managed their economies much better in the past twenty years, only to be hit hard by a crisis that originated in the center of the world economy. Financial crises often do expose weaknesses in the underlying incentive frameworks and the regulation and supervision systems that are supposed to reinforce them. But finance is risky business and it is naïve to think that regulation and supervision can – or should- completely eliminate the risk of crises, although they can make crises less frequent and less costly. Neither monetary policy nor capital controls can substitute for well designed prudential regulation. Despite their inherent fragility, financial systems underpin economic development. The challenge of financial sector policies is to align private incentives with public interest without taxing or subsidizing private risktaking. Public ownership or too aggressive regulation would simply hamper financial development and growth. But striking this balance is becoming increasingly complex in an ever more integrated and globalized financial system (Demirgüç-Kunt, Servén, 2009). How did this second great colossal muddle arise? In the aftermath of the Great Depression, we redesigned the machine so that we did understand it, well enough at any rate to avoid big disasters. Banks, the piece of the system that malfunctioned so badly in the 1930s, were placed under tight regulation and supported by a strong safety net. Meanwhile, international movements of capital, which played a disruptive role in the 1930s, were also limited. The financial system became a little boring but much safer. Then things got interesting and dangerous again. Growing international capital flows set the stage for devastating currency crises in the 1990s and for a globalized financial crisis in 2008. The growth of the shadow banking system, without any corresponding extension of regulation, set the stage for latter-day bank runs on a massive scale. These runs involved frantic mouse clicks rather than frantic mobs outside locked bank doors, but they were no less devastating. What we're going to have to do, clearly, is relearn the lessons our grandfathers were taught by the Great Depression. I won't try to lay out the details of a new regulatory regime, but the basic principle should be clear: anything that has to be rescued during a financial crisis, because it plays an essential role in the financial mechanism, should be regulated when there isn't a crisis so that it doesn't take excessive risks. Since the 1930s commercial banks have been required to have adequate capital, hold reserves of liquid assets that can be quickly converted into cash, and limit the types of investments they make, all in return for federal guarantees when things go wrong. Now that we've seen a wide range of non-bank institutions create what amounts to a banking crisis, comparable regulation has to be extended to a much larger part of the system. We're also going to have to think hard about how to deal with financial globalization. In the aftermath of the Asian crisis of the 1990s, there were some calls for long-term restrictions on international capital flows, not just temporary controls in times of crisis. For the most part these calls were rejected in favor of a strategy of building up 39 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo large foreign exchange reserves that were supposed to stave off future crises. Now it seems that this strategy didn't work. Exactly what form the next response should take isn't clear, but financial globalization has definitely turned out to be even more dangerous than we realized. (Krugman, 2009, p. 189) The World economy faces with financial crises in certain periods. From time to time those crises become more frequent and from time to time they become seldomly occurring. But we should note that just like the severity and intension of the earthquakes increases when the earthquakes are rare, the damage and cost of the financial crises to the economy increases if it has been a long time after the last event hit the world. Following the financial turmoil of 2007-2008 of which the negative effects still continue, there have been thousands of lessons taken out of the crises. All the lectures are about the policies to overcome the crises and the measures to take in order to prevent the new ones. But since the financial products, financial institutions and financial environment changes rapidly, every new crisis comes up with an unanticipated source. So every time there remains new lessons to learn for the economy. References Albulescu, Claudiu Tiberiu (2008); The Spread of the Capital Market‘s Global Crisis: Does The Countries‘ Industrial Profile Matter?, Journal of Applied Economic Sciences Issue 4 (6)/Volume III /Winter 2008 Basu, Kaushik (2009), A Simple Model of the Financial Crisis of 2007-9 with Implications for the Design of a Stimulus Package, conference on the Micro foundations of Development at the London School of Economics, May 30, 2009; CAE Working Paper #09-11 BIS, 79th Annual Report, (2009) Blundell-Wignall, Adrian; Atkinson, Paul and Lee, Se Hoon (2008), The Current Financial Crisis: Causes and Policy Issues, Financial Market Trends © OECD 2008 Boorman, Jack, (2009), Remarks for the South Asia Forum on the Global Economic and Financial Crisis, Manila, Philippines, March Caprio,G., Demirgüç-Kunt, Aslı and Kane, Edward,(2008), The 2007 Meltdown in Structured Securitization: Searching for Lessons not Scapegoats, Policy Research World Bank Working Paper, # 4756 Crotty, James (2009), Structural causes of the global financial crisis: a critical assessment of the ‗new financial architecture‘, Cambridge Journal of Economics 33, p. 563–580 Davis, E. Philip; Karim, Dilruba (2008), Could Early Warning Systems Have Helped To Predict the Sub-Prime Crisis? National Institute Economic Review 206; 35 Demirgüç-Kunt, Aslı; Servén, Luis (2009), Are All the Sacred Cows Dead? Implications of the Financial Crisis for Macro and Financial Policies, Policy Research Working Paper, # 4807 the World Bank. EEAG European Economic Advisory Group at CESifo, 2009, Report on European Economy 2009, www.cesifo-group.de, Access date: 07.05.2010 Eijffinger, Sylvester C.W. (2008), Crisis management in the European Union, Policy Insight No.27, Centre for Economic Policy Research, December Ergungor, O. Emre (2007), On the Resolution of Financial Crises: The Swedish Experience, Policy Discussion Papers, no 21, Federal Reserve Bank of Cleveland Ergungor, O. Emre and Thomson, James B. (2005), Systemic Banking Crises, Policy Discussion Papers, no: 9 Federal Reserve Bank of Cleveland Ergungor, O. Emre; Cherny, Kent, (2009), Effective Practices in Crisis Resolution and the Case of Sweden, Economic Commentary February, Federal Reserve Bank of Cleveland. Gills,B.(2008), The Swinging of the Pendulum: the Global Crisis and Beyond, Globalizations, vol.5, no. 4, p.13–22 Goldstein, Jonathan P. (2009) , Heterodox Crisis Theory and the Current Global Financial Crisis, Review of Radical Political Economics; 41; Book Review Essays, p. 560-569 40 �2nd International Symposium on Sustainable Development, June 8-9 2010, Sarajevo Krugman, Paul, (2009), The Return of Depression Economics and the Crisis of 2008, New York, W. W. Norton & Company, Inc. Lawson, Tony (2009), The Current Economic Crisis: Its Nature and the Course of Academic Economics, Cambridge Journal of Economics 33, p. 759–777 Minsky, H. (1986), Stabilizing an Unstable Economy, New Haven, CT, Yale University Press Minsky, Hyman P. (1987), ―Securitization,‖ Handout Econ 335A, Fall 1987, mimeo, in the Minsky Archive at The Levy Economics Institute of Bard College Monga, Celestin (2009), Post-Macroeconomics Reflections on the Crisis and Strategic Directions Ahead, World Bank Policy Research Working Paper, # 4986. Morgan, Jamie (2009), The limits of central bank policy: economic crisis and the challenge of effective Solutions, Cambridge Journal of Economics, 33, p.581–608 Nanto, Dick K.(2009), The Global Financial Crisis: Analysis and Policy Implications, Report for Congress, Congressional Research Service O‘Brien, Richard and Keith, Alasdair (2009), The geography of finance: after the storm, Cambridge Journal of Regions, Economy and Society , 2, p. 245–265 Orlowski, Lucjan T. (2008), Stages of the Ongoing Global Financial Crisis: Is There a Wandering Asset Bubble?, Halle Institute for Economic Research Discussion Paper, No.11 Pettifor, A. (2006), The Coming First World Debt Crisis, London, Palgrave Schneider, Friedrich; Kirchgässner, Gebhard (2009), Financial and world economic crisis: What did economists contribute? Public Choice 140: p. 319–327 Soros, George, (2008), The New Paradigm for Financial Markets, The Credit Crisis of 2008 and What It Means, BBS Public Affairs, NY Wray, L. Randall (2009), Money Manager Capitalism and the Global Financial Crisis, The Levy Economics Institute of Bard College Working Paper, No: 578, New York 41 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 154 Title A name given to the resource Managerial and Supervisory Mistakes Leading to Foreseeable Consequence: Global Financial Crisis Author Author KURNAZ, Niyazi TOPAL, Hanife KAYIK, Mustafa ÖZKAN, Harika Abstract A summary of the resource. The global financial crisis that began in summer 2007, deepened in 2008 and looks set to run for some time and to have profound effects on the global economy. For the 2007 subprime crisis, we consider that there are also some particular aspects which characterize the actual crisis, like the increased role of financial innovations (the securitization and credit derivatives) and a very important contagion phenomenon which began within the American economy and spread over the global financial markets. The subprime crisis extended at international level, following four main directions: at the root of the crisis lies a fundamental inconsistency between financial globalization – the process of liberalization and deregulation driving the impressive growth of world financial markets – and existing public rules and policies at both domestic and international levels. On the other hand; complex corporate structures managing financial innovation causing excessive risk taking and excessive leverage due to lack of adequate supervision enhanced the global disease. In this paper after discussing the causes of the global financial crisis, we will put forward ways and policies to overcome the ongoing crisis in global level. Date A point or period of time associated with an event in the lifecycle of the resource 2010-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 3605 Title A name given to the resource MANAGERIAL DECISION MAKING UNDER RISK IN COMMERCIAL BANKS: AN APPLICATION OF PROSPECT THEORY ON BANKS IN BOSNIA AND HERZEGOVINA Author Author Halaba, Amra Abstract A summary of the resource. The main objective of this research is to investigate behavioral factors in the managerial decision making under risk in commercial banking from the perspective of the basic theory in behavioral finance – the prospect theory. The study is important in that it contributes to the development of a comprehensive risk management approach in banking industry, by broadening already existing practices with behavioral finance findings, as summarized through the prospect theory. The theory explains the decision making processes, holding that managers become more risk seeking as their bank moves further below the specified targets and more risk seeking as their bank moves further above the specified targets. The theory is examined on the case of B&H banks from 1999 to 2015, in the light of returns on assets, returns on equity and capital ratio. Analyses show risk seeking among managers of banks below targets, whereas there is no evidence for risk aversion among managers of banks above target. Therefore, the prospect-theory-based model of managerial decision making offered in this research is suitable ground-basis to ingrain the behavioral insights into risk management processes in the banking industry of Bosnia and Herzegovina. Keywords: Prospect Theory, Decision Making, Risk, Commercial Banking, Bosnia and Herzegovina. Date A point or period of time associated with an event in the lifecycle of the resource 2016 Keywords Keywords. Thesis NonPeerReviewed H Social Sciences (General) https://omeka.ibu.edu.ba/files/original/f248e1c2ac714543b1049b08ebe3e786.pdf bb505260c8653f864973c16c2f77c66a PDF Text Text International Conference on Economic and Social Studies, 10-11 May, 2013, Sarajevo Managers' Power Distance in Bosnia and Herzegovina Azra Brankovic International Burch University, Sarajevo, Bosnia and Herzegovina azrabrankovic@yahoo.com Power distance is a cultural dimension developed by Dutch scientist, Geert Hofstede and determines how different societies handle inequality. Inequality is a fact that exist in the family, school, organization and society. The Gini index shows that Bosnia and Herzegovina is a very unequal country, just behind the poor African countries such as Namibia, Botswana and Sierra Leone. Bosnia and Herzegovina is also the most unequal country in the region. The paper will present Gini index for selected countries and Bosnia and Herzegovina. The paper will explain characteristics of cultures with high and low power distance and present index of power distance for selected countries based on secondary research. Bosnia and Herzegovina, according to these dates, has a high index of power distance. The paper will try to explain the reasons for high power distance in Bosnia and Herzegovina. Inequality is present in organization in manager-subordinate relation. The power is concentrated in the hands of the boss and different opinions and critics can be dangerous. Not agreeing with the decisions of the chiefs, or public criticism or exposing irregularities can lead not only to problems in the work, but also to loss of job. Primary research has been done on the sample of 50 managers from all parts of Bosnia and Herzegovina. Managers participating in research belong to the different ethnic groups. Managers are genders, approximately half of managers included in the research are men and the other half is women. Managers have different jobs. Half of the targeted managers work as civil servants for the ministries, parliaments and government agencies. The other half of managers work for international organizations, business or business related to international clients. The purpose of this research is to determine if there is difference in power distance related to gender, ethnicity or job of managers. The purpose of the research is to determine if there is a difference in power distance between managers and average citizens of Bosnia and Herzegovina. Date was analyzed using Statistical Package for the Social Sciences. Keywords: Managers, Culture, Power Distance, Inequality, Bosnia And Herzegovina 51 � https://omeka.ibu.edu.ba/files/original/c7a67723a8fd6ffd9fc51434425c8962.docx 1707ab013675c2acbf3a358e1e0e60e7 https://omeka.ibu.edu.ba/files/original/c662b3c6cbf6595e2466c5614bd38e6c.pdf 760e14e6e317336386e896577e3c6c57 PDF Text Text International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Managers' Power Distance in Bosnia and Herzegovina Azra Brankovic International Burch University, Sarajevo, Bosnia and Herzegovina azrabrankovic@yahoo.com Abstract Power distance is a cultural dimension developed by Dutch scientist, Geert Hofstede and it determines how different societies handle inequality. Inequality is a fact that exists in the family, school, organization and society. The Gini index shows that Bosnia and Herzegovina is a very unequal country, just behind the poor African countries such as Namibia, Botswana and Sierra Leone. Bosnia and Herzegovina is also the most unequal country in the region. The paper will present the Gini index for selected countries and Bosnia and Herzegovina. The paper will explain characteristics of cultures with high and low power distance and present the index of power distance for selected countries based on secondary research. Bosnia and Herzegovina, according to these dates, has a high index of power distance. The paper will try to explain the reasons for high power distance in Bosnia and Herzegovina. Inequality is present in organizations in manager-subordinate relation. The power is concentrated in the hands of the boss and different opinions and critics can be dangerous. Not agreeing with the decisions of the chiefs, or public criticism or exposing irregularities can lead not only to problems in the work, but also to loss of job. Primary research has been done on the sample of 51 managers from all parts of Bosnia and Herzegovina. Managers participating in research belong to the different ethnic groups. Managers are of different genders, approximately half of the managers included in the research are men and the other half is women. Managers have different jobs. Half of the targeted managers work as civil servants for the ministries, parliaments and government agencies. The other half of managers work for international organizations, international business or business related to international clients. The purpose of this research is to determine if there is difference in power distance related to gender, ethnicity or jobs of managers. The purpose of the research is to determine if there is a difference in power distance between managers and average citizens of Bosnia and Herzegovina. The data was analyzed using the Statistical Package for Social Sciences. Key words: Managers, Culture, Power Distance, Inequality, Bosnia And Herzegovina Introduction Power distance determines how different societies handle inequality.It is a cultural dimension developed by Dutch scientist, Geert Hofstede, who conducted a study in IBM subsidiaries in over 70 countries around the world between 1967 and 1973. He empirically 80 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo demonstrated the existence of differences in national cultures and the power of distance, as one of the cultural dimensions.1 Primary research has been done on the sample of 51 managers from all parts of Bosnia and Herzegovina in 2011 and 2012. The purpose of the primary research is to determine the degree of power distance of managers in Bosnia and Herzegovina. The purpose of the research is also to determine if there is a difference in power distance between managers and average citizens of Bosnia and Herzegovina. The purpose of this research is also to determine if there is difference in power distance related to gender, ethnicity or jobs of managers. The survey was sent by e-mail, however due to the lack of responses, in many cases managers answered questions in direct interviews. Thus the managers had the opportunity to discuss questions and give their comments, explanations and objections. SPSS (Statistical Package for the Social Sciences) has been applied to analyze the surveys. Power distance as a measure of inequality Inequality exists in every society. “Globalwealthpyramidhas abroad baseanda very narrowandsharp peak. The richest1% of the population controls43% ofthe world's wealth, the richest10% has83% ofthe world's wealth. 50% at thebottom of the pyramidhas only2%. The richest10% controls theworld capital and they choose where toestablishnewjobs, whichpoliticians will be electedandto which charities money willbe given. “ 2 Different societies have different attitudes toward inequality. Some societies think that it is an acceptable and even good thing. Other societies think that inequality is an inevitable fact of life, however, it is a bad thing and should be minimized as much as possible. This attitude depends on national culture and the cultural dimension called power distance. Power distance is the measure to which members of the national culture approve and expect that power is distributed unequally in society. Thus, power distance indicates which degree of inequality between people can be tolerated in this society. Inequality is a very complex and interdisciplinary phenomenon, which is the focus of anthropologists, sociologists, historians, and those who deal with management and organization. The legal system states that all people are equal in front of the law. The UN resolution on human right declares that all people are born free and equal. However, inequality exists in all societies, institution and relations. Inequalityexistsin all institutions andsocial relations.Inequalityexists in thefamily, schools, organizations and countries.In the family,parentshavepower overchildren; teachershave power over students in the schools.Inequalityis reflected in theexistenceof differentsocial classesin society. In the organization, jobs thatrequirethe minimaleducationandthe 1 See Hofstede, G., Hofstede G.J., and Minkov, M. (2010). Cultures and Organizations: Software of the mind. 3rd edition. New York: McGraw Hill Companies, page 53-89 and Hofstede, G. (2001). Culture’s consequences: Comparing Values, Behaviours, Institutions and Organizations across Nations. Thousand Oaks, Ca : Sage publications, Inc., page 79-137 2 See The Economist (2011). More millionaires than Australians, A special report on global leaders. January 22nd-28th, 2011, page 6-7 81 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo loweststatus,asunqualified workers,have a large power distance. Jobswith the greateststatus andeducational level,like managersandprofessionalworkers, havea small power distance. Power distance in the organization Inequality is present in the organization in manager-subordinate relation.In the countries with high powerdistance,inequalityis seenas the basisfor the functioning ofsocietyand organizations.There is a hierarchyin an organization thatreflectsinequalitybetweensubordinatesandsuperiors.The idealmanagerisan autocrat, who makes all decisions. Decision-making iscentralized; there is a highconcentrationof authority.Power isconcentrated inthe fewest possiblehands. Managersrely onformal rules. Subordinatesexpectto be toldwhattodo.The organizationalpyramidis high;there are manysuperiors anda lot of reporting oneachother.Access to informationisrestrictive. Managers are seen assuperiorpersonswhose decisionsmust be respectedwithout question. Subordinatesquickly learnthat it is dangerousto oppose thedecision of the manager and he/she neveropenlyopposes the decisions ofthe superior. There is noprotectionfrom superior’s harassment. Managersare seen asmorevaluablethanthesubordinates and it is normal for them to haveexpensive homes, cars,privileges andtodemonstrate it publicly. It is also considered normalthat managers use thepowerfor theirenrichment. The distribution of income is unequal. There is a high differenceinsalariesamongthose at the topandbottom of theorganizationalpyramid.The range isbiggerif thepowerdistanceis bigger. In countrieswith smalldistance,it is considered thatall people haveequal rights. There are nosignificant differencesbetween superiors and subordinates. Superiorsandsubordinatesare considered equal, the position in the hierarchyis unevenbecause ofthe job requirements,buttheroles maychange, if someone is the manager today,he/shemay not betomorrow. The organizationis decentralized, the organizationalpyramidis flat, and the number of supervisorsissmall.There is a lowconcentrationof authority. The decision making structure is decentralized. Information is shared. Differences insalariesbetween the top andbottom of the pyramidare small. Managers should not have any privileges because they have power in organization. Managers should not especially show that power. In countries with small power distance those whoarein higher positionsdo not havethe privileges, all use the samerestaurant, parking, and toilets. Employeeswill relatenegativelyto themanagerwhohas theexpensivecaror shows his/hers position in any otherway.Supervisorsare availableto subordinates. The idealmanageris ademocrat, whoconsultsthe subordinatesbeforemaking a final decision. If the employeebelieves thatthe manager violates his/hers rights, there are ways toappealthat are alreadyembeddedin theorganization. 82 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo A survey3 that was conductedamong managersinnineWestern European countries, the United States andthree Asiancountries(Indonesia, Japan and China) showsthe differences inpowerdistance. When asked whetherthe main reasonfor the existence ofa hierarchy is the needto knowwho has the authorityover whom, American managers haverespondednegatively.Americanmanagersbelieve ina flatorganizationwithout a lot ofhierarchical levels, where all behave ascolleaguesrather than assubordinates andsuperiors. Hierarchy for American managers exists only in order to organize the workand to solve the problem. UnlikeAmericans,83% ofIndonesia'smanagershaveagreedwith this statement. It is the most important for them toknow whoreports to whom. It is the most importantto determinewho willbe the managerand who willbe the subordinate; everything else comes later. Different cultureshave alsoshowndifferences in responseto the question whetherit is necessary tobypasshierarchical linesin order to achieveeffectiveworking relationship, and whether themanager mustknow theprecise answerto allthe questions thatemployees mayask.Swedishmanagersdid not seeanyprobleminbypasshierarchicallines.They believethat it is normalto referto the person whoknows the answerto the question, not his/hers manager,regardless ofhierarchy.Swedishmanagers do notbelievethat there is amanager whoknows everything. Therefore, they see bypassinghierarchical lines as natural,logical, and the only real wayfor employeesto worksuccessfullyintoday's world ofconstantchange.Similaranswerswere givenby the Americans. However, theIndonesians, the French and theItaliansbelieve thatbypassing thehierarchy isinsubordinationanda bad thingin an organization. They strongly believe that all the questions have to be addressedto the manager who hasall the answers. There are a lotof researches in theory of management andorganization that prove that small power distance leads thehigher efficiencyof the organization. Participationof workersin managementwas very popularin themanagementliteraturein the 1970’s. Manyresearchers have shownthat the participationof workersin the management isbeneficial from the economicpoint of view,and that thegreater participation ofworkersin managementis positively correlatedwith the growthof the gross domesticproduct. The ranks of countries in the world according to power distance index for selected countries are shown below. 4 3 See Adler, N. J. (2002). International Dimension of Organization Behavior. 4th edition. Cincinnati,OH: South Western Thomas Learning, page 48 -51. 4 See Hofstede, G., G.J.Hofstede, and M. Minkov, (2010). Cultures and Organizations: Software of the mind, 3rd edition, McGraw Hill Companies, USA, page 57-59 83 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Table 1. Rank and power distance index for selected countries Country Index Rank (out of 76 countries) Malaysia 104 1-2 Guatemala 95 3-4 Russia 93 6 Arab countries 80 12-14 China 80 12-14 India 77 17-18 Turkey 66 32-33 Italy 51 50 Germany 35 65-67 Sweden 31 69-70 New Zealand 22 73 Denmark 18 74 Israel 13 75 Austria 11 76 Source: Hofstede, G., G.J.Hofstede, and M. Minkov. (2010). Small power distance countries are rich countries, as Scandinavian countries, Great Britain, Germany, Switzerland and Austria. Power distance in Bosnia and Herzegovina Bosnia and Herzegovina has a high power distance. There is no power distance index value for Bosnia and Herzegovina. However, there is data for former Yugoslavia, which Bosnia and Herzegovina was part of in the time when this research was done. InHofstede's calculations, Yugoslavia was locatedveryhigh,at19th position with an index of 76,which meansthat YugoslaviaandBosnia and Herzegovina, aspart of it, belong to the countrieswhere thepowerdistance is quitehigh.5 Data onneighboring countries, Serbia, Croatiaand Slovenia, which was recalculatedbased onthe originalresearch,also suggeststhatall these countrieshave a highpower distance, which, based on the principleof correlation,can be claimedforBosnia and Herzegovina. Country Table 2. Power Distance Index Value for ex-Yugoslav countries6 Index Rank (out of 76 countries) Serbia 86 8 Croatia 73 20 Slovenia 71 21 Source: Hofstede, G., G.J.Hofstede, and M. Minkov (2010). 5 See Hofstede, G. (2001). Culture’s consequences: Comparing Values, Behaviours, Institutions and Organizations across Nations. Thousand Oaks, Ca : Sage publications, Inc., page 500 6 See Hofstede, G., G.J.Hofstede, and M. Minkov, (2010). Cultures and Organizations: Software of the mind, 3rd edition, McGraw Hill Companies, USA, page 57-59 84 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo It is easy to notice high power distance in Bosnia and Herzegovina in everyday life and media. Parents take care ofchildren, try toprotect themand make decisionsfor them.Childrenin turntake care oftheir parentsas long astheylive. Big part in the structureof the gross domesticproductof Bosnia and Herzegovina belongs to remittances, which Diasporas send in order to helptheir parents.Remittancesamounted to11.9% of gross domesticproduct in the year 2004.7This informationapplies only toformalbankingtransfers;the amountisprobablyhigher due toinformalmethodsof transferringmoneythrough friends, relatives, etc. Obedience is afeaturethat parentsand teachersexpect from the children, managers from the subordinateand politiciansfrom citizens. Opposition orpubliccriticismis not desirable. Thismay not only causeinconvenience,but can have also more serious consequences, as the lossof jobs. In Bosniaand Herzegovina, as well asin all societieswith highpowerdistance, people who have the power have rights.It is normalfor those whoarein powerand for thecitizens. Everybody is equal before the law, but those who have the power,getthe case in the court. Or they canlegallypayto avoidjail.Newspapersreportedthe changesof the CriminalCode of the Federationof Bosnia and Herzegovina, which enteredinto force on 21July2010. Changes in the lawsallowthose who aresentenced toup to one yearto payandgain freedom. The priceis36,000marksa year. It is normal forpeople whohave power to make scandals, but it is always covered.Ifthings go wrong, the blame is on theone who isat the bottom. In thesecultures, the people who have powertry tokeep itat any cost.They usethis powertomaximize theirwealth. Taxesandsocial policies do not favorredistribution of incomeasin the Scandinavian countries, but they are designedsothat the richbecome richerand the poorpoorer.World Bank researchshows that4% of the gross domesticproduct is spent onsocial benefits in Bosniaand Herzegovina. It ismorethanany other countryin Europe and CentralAsia.However, theimpact of thesebenefitson poverty reductionisalmost nonexistent, becausethey are merit based instead of need based. Three-quartersof thesebenefitsgo topeople who have hadcreditin the last war, and the bearersof variousmedals.8 There are big differences inthe distribution of incomein Bosnia and Herzegovina. There are afewrich peopleand a lot ofpoor people. The Giniindexshowsthat Bosnia and Herzegovinais one of themostunequalcountries; it is immediately behindpoorAfrican countriessuch asNamibia, BotswanaandSierraLeone. 7 See Branković, A. (2005). Economic reality and vision ofBiH. Sarajevo: Parliamentary Assembly of BiH, page 3 8 World Bank (2009). Social safety nets and Employment support project in Bosnia and Hercegovina. Retrived 25.04.2013. URL: http://reliefweb.int/sites/reliefweb.int/files/resources/92676C6642CB2F5A492576D6001944AFFull_Report.pdf 85 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Table 3. List of the most unequal countries in the world9 Country Gini index Namibia 70.7 South Africa 65 Lesotho 63.2 Botswana 63 Sierra Leone 62.9 Bosnia and Herzegovina 56.2 United States of America 45 Russia 42.2 China 41.5 Source: world Bank and CIA The Giniindexshows thatthe mostunequalcountries in theworld arepoorAfrican countries. The United States, although it is a veryrich country is an unequal country.Russia, China andIndiaare alsounequalcountries.Bosnia and Herzegovinais a very unequalcountryanditis similar toAfrican countries. The most equal countries are Scandinavian countries and other rich European countries. Powerdistanceisrelated to thewealthof the country.Bosnia and Herzegovinais a poor country, and poorercountry means the bigger powerdistance.Bosnia and Herzegovina is together withAlbaniathepoorest countriesin the Europe. 10 Highpowerdistancemay be alsoexplained with thehistory. Bosnia and Herzegovinahas been in thelargestpart of itshistoryundervarious conquerors, which contributed to creating amentalityin whicheveryone whohas the power must be respected. Primary research on managers’ power distance in Bosnia and Herzegovina Primary research has been done on the sample of 51 managers from all parts of Bosnia and Herzegovina with the purpose to determine the degree of power distance of managers in Bosnia and Herzegovina; to determine further if there is difference in power distance related to gender, ethnicity or job of managers; to determine finally if there is a difference in power distance between managers and average citizens of Bosnia and Herzegovina. The degree of power distance has been measured by managers’ decision making style, managers’ attitude towards employees’ participation in decision making, managers’ attitude toward expressing disagreement with managers’ decisions, managers’ attitude toward differences in salaries and status, managers’ attitude toward asking for salary increase and benefits. The results of primary research showthat theBosnianmanagers have amedium degreeof power distance. Managers’ answers to certain questions show that managers belong to a 9 The World bank (2013). Gini index. Retrived 25.04.2013. URL: http://data.worldbank.org/indicator/SI.POV.GINI & Central Inteligence Agency (2013). The World Factbook. Retrived 25.04.2013. URL: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html 10 The Vienna Institute for International Economic Studies (2012). Wiiw Handbook of Statistics, page 10. 86 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo high power distance culture, as all other citizens of Bosnia and Herzegovina. One of these questions is related to expressing disagreement with the boss. Managersagree thatin Bosnia and Herzegovinaemployeesare often afraidto express theirdisagreementwith the boss, which is a characteristicof highpowerdistance cultures. Chart 1. Employees are afraid to express disagreement with managers 60.0% Employees are afraid to express their disagreement with the boss 52.9% 50.0% 40.0% 30.0% 20.0% Frequency 19.6% 17.6% 9.8% 10.0% 0.0% 0.0% Strongly agree Agree Undicided Disagree Strongly disagree Source: Author’s primary research Managers also think that they should have higher salaries, privileges and status in comparison with subordinates, what is a characteristic of high power distance. It is interesting to note that manager answered that managers are employees as others. However, other answers demonstrate a different picture. This is especially the case with questions related to employees’ participation in management and democratic decision making. Managers in Bosnia and Herzegovina appreciate employees’ participation in management. They think that the ideal manager is a democrat, who consults with subordinates before making any decision. They also think that an autocratic manager who makes all the decision by himself is not good for business. They think that employees’ participation in management leads to better business results. All these answers relate to small power distance cultures. 87 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo Chart 2. Ideal manager is democrat Ideal manager is democrat 80.0% 66.7% 70.0% 60.0% 50.0% 40.0% Frequency 30.0% 20.0% 19.6% 9.8% 10.0% 3.9% 0.0% 0.0% Strongly agree Agree Undicided Disagree Strongly disagree Source: Author’s primary research The third group of questions indicates that managers in Bosnia and Herzegovina have a medium power distance. Managers are undecided about the statement that most employees do not like the work and will avoid it if they can. Managers are also undecided in the regard that employee should not ask for salary increase, even if they think that they deserve it. Based onall of the above,we can conclude thatthere is a differencein the power distance between managersand the citizens ofBosnia and Herzegovina.The resultsof primaryresearch showthat managershave smaller power distancecompared to the averagein Bosnia and Herzegovina. There could be severalexplanations for this difference. The research thatwas carried out inthree countries(France,Germany, Great Britain), among38 differentoccupationsin IBM'ssubsidiaries, confirm thatoccupations thatrequirethe leasteducationandthe loweststatusasunskilledorsemi-skilledworkershave a bigger powerdistance. In contrast, theoccupationswith the higheststatus andeducational level, such as managersandprofessionals likeengineersandscientists,have a small power distance. 11 Managersin Bosnia and Herzegovinahavemore educationandhigherstatusthan does theaveragecitizen ofBosnia and Herzegovina,and therefore, as well astheir counterpartsfrom France, Germanyand Great Britainhave a lowerpowerdistance. Managersin Bosnia and Herzegovinahavehigher incomesthan theaveragecitizen ofBosnia and Herzegovina.Thisculturalcharacteristic isclosely associatedwith wealth; more moneymeans lesspowerdistance. The questions thatputBosnia and Herzegovina’s managers in a culturewith lowpowerdistancearerelated to theparticipationof workersin management.Yugoslavia was 11 Hofstede, G., Hofstede G.J., and Minkov, M. (2010). Cultures and Organizations: Software of the mind. 3rd edition. New York: McGraw Hill Companies, page 65 88 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo asuccessfulexample of a countrywithparticipationof workersin management and it was studiedas amodelaround the world,andits achievementshave beencopiedin muchricher and moreeconomicallydeveloped countries. A consortiumof researchers from12mostlyEuropeancountries hasformeda researchgroupIDE(IndustrialDemocratizationof Europe) to study participation of workers in management. The projectbegan in 1981and lastedsix years. Data was collectedfrom134organizationsfrom allareas here and of all sizes.The questionnaire wasfilledby 1000managers and8000employeesandofficers. In 1981 the IDE has shown that themost successful countrywas Yugoslavia. Academicliteraturestates thatit remainsa puzzle anda question forfuture researchershow such a successfulcountryin terms ofindustrial democracycould collapseshortlythereafterin a bloody war. 12 Theprimaryresearch included men and womenmanagersin Bosnia and Herzegovina. Sinceboth women and men are the childrenof their culture, one might assume thatthey bothhave the sameculturalcharacteristics.However,some studiesshow thatwomen in business are softerand havemore understandingfor others,as opposed tomenwhoare hard,aggressive andcompetitive. Results ofthe statistical analysis found nodifferences inculturalcharacteristicsbetween men and womenmanagersin Bosnia and Herzegovina. This study aimed toresearch whetherthere are differences in power distance between managersin businessand thosein state administration. According toculturaltheorieswe are allchildrenof our culture and we all carryvalues,patterns, andbehaviors ofour cultures.However,otherstudies have confirmedthat there arecultural differenceswithin the same country, depending on education and thework that we do. Results of statistical analysisshowthat there were nodifferences in power distancebetween managerswho workin public administration andthose who workin the business. BosniaandHerzegovinahas a specificethnicstructure composedofBosniaks(44%), Serbs(31%), Croats(17%) andothers(8%).13Results of statistical analysisshowedthat there were nodifferences in power distanceamong managers in these three ethnic groups. Historically, Bosnia and Herzegovina wasalways a mixture ofdifferent nations and cultures, which have been living together. Fromthe earliest times, the population accepted theachievements of otherculturesin technology,building,architecture, art, cuisine,and lifestyle.Based on all of the above,the results of the primary researchconfirmed whatwas obviousthroughouthistory. Conclusion Bosnia and Herzegovina is one of the most unequal countries in the world, close to poor African countries. Secondary research puts Bosnia and Herzegovina amongst countries with high power distance. The high power distance index can be explained with poverty, as Bosnia is the poorest country in Europe. An explanation can be also found in the long history of Bosnia and Herzegovina. Bosnia and Herzegovinahas been during thelargestpart of itshistoryundervarious conquerors, which contributed to creating amentalityin whicheveryone whohas the power deserves respect. Primary research has not found any differences in power distance between genders, ethnicity and jobs that managers performed. However, primary research shows that 12 See Hofstede, G. (2001). Culture’s consequences: Comparing Values, Behaviours, Institutions and Organizations across Nations. Thousand Oaks, Ca : Sage publications, Inc., page 110. 13 See European Commission (2011). Multi-annual indicative planning document 2009-2011 for Bosnia and Hercegovina. 89 �International Conference on Economic and Social Studies (ICESoS’13), 10-11 May, 2013, Sarajevo managers in Bosnia and Herzegovina have smaller power distance. It can be explained with better education, economic position and valuable network that managers acquired. References 1. Adler, N. J. (2002). International Dimension of Organization Behavior. 4th edition. Cincinnati,OH: South Western Thomas Learning 2. Branković, A. (2005). Ekonomska stvarnost i vizija BiH. Sarajevo: Parliamentary Assembly of Bosnia and Herzegovina 3. Central Intelligence Agency (2013). The World Factbook. Retrieved 25.04.2013. URL: https://www.cia.gov/library/publications/the-worldfactbook/rankorder/2172rank.html 4. The Economist (2011). More millionaires than Australians, A special report on global leaders. January 22nd-28th 5. European Commission (2011). Multi-annual indicative planning document 2009.2011. for Bosnia and Herzegovina 6. Hofstede, G. (1991). Cultures and Organizations: Software of the mind. London: McGraw Hill Companies, Inc. 7. Hofstede, G. (2001). Culture’s consequences: Comparing Values, Behaviours, Institutions and Organizations across Nations. Thousand Oaks, Ca : Sage publications, Inc 8. Hofstede, G., Hofstede G.J., and Minkov, M. (2010). Cultures and Organizations: Software of the mind. 3rd edition. New York: McGraw Hill Companies 9. The Vienna Institute for International Economic Studies (2012). Wiiw Handbook of Statistics 10. World Bank (2009). Social safety nets and Employment support project in Bosnia and Hercegovina. Retrieved 25.04.2013. URL: http://reliefweb.int/sites/reliefweb.int/files/resources/92676C6642CB2F5A492576 D6001944AF-Full_Report.pdf 11. The World bank (2013). Gini index. Retrieved 25.04.2013. URL: http://data.worldbank.org/indicator/SI.POV.GINI 90 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 1496 Title A name given to the resource Managers' Power Distance in Bosnia and Herzegovina Author Author BRANKOVIC, AZRA Abstract A summary of the resource. Power distance is a cultural dimension developed by Dutch scientist, Geert Hofstede and determines how different societies handle inequality. Inequality is a fact that exist in the family, school, organization and society. The Gini index shows that Bosnia and Herzegovina is a very unequal country, just behind the poor African countries such as Namibia, Botswana and Sierra Leone. Bosnia and Herzegovina is also the most unequal country in the region. The paper will present Gini index for selected countries and Bosnia and Herzegovina. The paper will explain characteristics of cultures with high and low power distance and present index of power distance for selected countries based on secondary research. Bosnia and Herzegovina, according to these dates, has a high index of power distance. The paper will try to explain the reasons for high power distance in Bosnia and Herzegovina. Inequality is present in organization in manager-subordinate relation. The power is concentrated in the hands of the boss and different opinions and critics can be dangerous. Not agreeing with the decisions of the chiefs, or public criticism or exposing irregularities can lead not only to problems in the work, but also to loss of job. Primary research has been done on the sample of 50 managers from all parts of Bosnia and Herzegovina. Managers participating in research belong to the different ethnic groups. Managers are genders, approximately half of managers included in the research are men and the other half is women. Managers have different jobs. Half of the targeted managers work as civil servants for the ministries, parliaments and government agencies. The other half of managers work for international organizations, business or business related to international clients. The purpose of this research is to determine if there is difference in power distance related to gender, ethnicity or job of managers. The purpose of the research is to determine if there is a difference in power distance between managers and average citizens of Bosnia and Herzegovina. Date was analyzed using Statistical Package for the Social Sciences. Keywords: Managers, Culture, Power Distance, Inequality, Bosnia And Herzegovina Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-10 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 978-9958-834-23-3 https://omeka.ibu.edu.ba/files/original/08c1c07b0faad5f6a1f4372a14b8cc87.pdf 15a10e3f38773dd6d0f75c50b6e1bd62 PDF Text Text BİLDİRİ ÖZETLERİ - UTEK 2014 sorun özellikle cinsiyet ayrımının (eril/dişil kavramının) belirgin olduğu dillere Türkçeden çeviri yapılması sırasında ortaya çıkmaktadır. Özellikle öz Türkçe ve Farsça isimlerde bu sorun daha fazla göze çarpmaktadır. Öte yandan, bir yabancı Türkçe isimlerin anlamlarına hakim olduktan sonra görecektir ki bu isimler cinsiyetlere toplumsal olarak yüklenen roller ve vasıflarla paralellik göstermektedir. Örneğin erkek ismi Yiğit bir erkeklik vasfı olarak ya da kadın ismi Narin bir kadınlık vasfı olarak bu isimlere tipik birer örnek teşkil ederler. Bu çalışmada özel isimler cinsiyet perspektifi bakımından değerlendirilecektir. MANİSA İLİNDE YERLEŞİK ‘BALKAN GÖÇMENLERİ’ AĞIZLARINDA FİİL ÇEKİMLERİ İLE İSİMLERE GETİRİLEN “ -çi, -ci, -cu ; -çìk; -sı,-si, -su; -sım,-sim,-süm; -sık,-sik, -suk, -sıg,-sig; -zık; -go ” EKLERİ VE YAPISI ÜZERİNE Senem AKYOL Celal Bayar Üniversitesi, Manisa / Türkiye Anahtar Kelimeler: Manisa, Balkan göçmenleri, ağız, pekiştirme ekleri. ÖZET Manisa’da yerleşik Makedonya, Kosova ve Bulgaristan göçmen ağızlarıyla ilgili derleme çalışmalarımız esnasında hem fiiller hem de isimlerle kullanılabilen birtakım eklerle karşılaştık. Bu ekler, Sarıova, Köprülü, Usturmica’da ‘-çi, -ci/-cu’; Sarıova’da ‘çìk’; Koçana, Köprülü, Debre, Usturmica, Sarıova’da ‘sı/si,-su’; Debre, Radoviş, Koçana, Köprülü, Manastır, Sarıova, Usturmica’da ‘-sık/-sik, -suk, -sıg/sig’; Köprülü’de ‘-zık’; KosovaPrizren’de ‘-sık’; Kırcaali’de ‘-sım/-sim/-süm;-sık’; Koçana’da ‘-go’ şekilleriyle fiil çekimlerinden sonra yaygın olarak kullanıldığı gibi ayrıca Debre, Koçana, Radoviş, Köprülü’de ‘-çi, -çu’; Koçana, Köprülü’de ‘-sı/-si’ ve Bulgaristan-Şumnu ile Omurtag’ta ‘-si’; Sarıova, Koçana’da ‘-sık,-sig’; Koçana’da ‘-go’ biçimleriyle isimlerden sonra da geniş bir kullanım alanına sahiptir. Batı Rumeli ağızlarında 1. çokluk şahısta -sık/-suk eklerinin yaygın olarak kullanıldığını literatür taramalarımızdan biliyoruz. Biz de Manisa Balkan göçmeni ağızlarında bu yaygın kullanımın şahidi olduk ve ilaveten Bulgaristan-Kırcaali’de duyulan geçmiş zamanın 1.teklik şahsında ‘-sım,-sim,süm’ eklerinin kullanıldığını tespit ettik. Köprülü-Köseler’de gördüğümüz 40 �BİLDİRİ ÖZETLERİ - UTEK 2014 1.çokluk şahıstaki -sık/-sı nöbetleşe kullanımı ilginçti ve çalışmalarımız ilerledikçe 2.- 3. şahıslarda da farklı şekillerin olduğunu gördük. Bu şekilleri, 2.teklik şahıs için, şimdiki zamanda -sı/-si(< -sın/-sin), geniş zamanda -si (< sin); 2.çokluk şahıs için şimdiki zamanda -sını( < -sınız) ; 3. teklik şahıs emir çekiminde ise -sı /-su ( < -sın / -sun) biçiminde sıralayabiliriz. Literatür taramalarımızın (‘-sIk; -sIm’ ekleri dışında) bulduğumuz diğer ekler için aynı derecede cömert davrandığını söyleyemiyoruz. Bahis konusu ekler, haber kiplerinin 1. teklik şahsında ‘-çi; -si’, 3. teklik şahsında ‘-ci, -si, -su’, 1.çokluk şahsında ‘-si’, 3. çokluk şahsında ‘-cu, -çìk, -si’; emir 2. teklik şahıs çekiminde ‘-si’; ek fiilin 3. teklik şahıs çekiminde ‘-sig’ şeklinde ve fiil çekimlerinin dışında isimlere de ‘-çi / -çu; -sı / -si; -sık / -sig; go ’ şekilleriyle eklenebilmektedir. Bu makalede, öncelikle bulduğumuz örneklerin bir dökümünü yaptık. Ardından bu eklerin yapısı üzerinde durduk.Türkçedeki ‘çI/çU; şu’ pekiştirme edatı ile münasebetlerini tartıştık. KERKÜKÎ ABDÜSSETTÂR EFENDİ VE Mİ’RÂCİYYE’Sİ İsmail YILDIRIM Kırıkkale Üniversitesi, Kırıkkale / Türkiye Anahtar Kelimeler: Mi’râciyye, Abdüssettâr Efendi, İslâmî Türk Edebiyatı, Hz. Peygamber. ÖZET Türk İslâm edebiyatı geleneği çerçevesinde Hz. Peygamber’in doğumu, manevî yaşam tarzı, mucizâtı, şahsiyeti ve ölümü üzerine birçok eser kaleme alınmıştır. O’nun hayatı etrafında meydana getirilen eserler ya müstakil olarak kaleme alınmış ya da yazar meydana getirdiği eserinin bir bölümünü bazı nazım şekilleri altında, Hz. Peygamber’in mucizeleri veya vasıflarına ayırmıştır. Hicretten yaklaşık bir yıl önce, Recep ayının 27. gecesinde zuhûr eden Mi’râc hadisesi; Hz. Peygamber'in, ilahî sevk ile Mescid-i Haram’dan Mescid-i Aksâ’ya ve nihayetinde Yüce Allah ile görüşüp, bazı ilahî emirleri almasından müteşekkildir. Bu hadise birçok yazar ve şair tarafından kaleme alınmış; zamanla “Mi’râciyye, Mi’râc-nâme” adı altında eserler meydana 41 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2709 Title A name given to the resource MANİSA İLİNDE YERLEŞİK ‘BALKAN GÖÇMENLERİ’ AĞIZLARINDA FİİL ÇEKİMLERİ İLE İSİMLERE GETİRİLEN “ -çi, -ci, -cu ; -çìk; -sı,-si, -su; -sım,-sim,-süm; -sık,-sik, -suk, -sıg,-sig; -zık; -go ” EKLERİ VE YAPISI ÜZERİNE Author Author AKYOL, Senem Abstract A summary of the resource. Manisa’da yerleşik Makedonya, Kosova ve Bulgaristan göçmen ağızlarıyla ilgili derleme çalışmalarımız esnasında hem fiiller hem de isimlerle kullanılabilen birtakım eklerle karşılaştık. Bu ekler, Sarıova, Köprülü, Usturmica’da ‘-çi, -ci/-cu’; Sarıova’da ‘çìk’; Koçana, Köprülü, Debre, Usturmica, Sarıova’da ‘sı/si,-su’; Debre, Radoviş, Koçana, Köprülü, Manastır, Sarıova, Usturmica’da ‘-sık/-sik, -suk, -sıg/sig’; Köprülü’de ‘-zık’; Kosova- Prizren’de ‘-sık’; Kırcaali’de ‘-sım/-sim/-süm;-sık’; Koçana’da ‘-go’ şekilleriyle fiil çekimlerinden sonra yaygın olarak kullanıldığı gibi ayrıca Debre, Koçana, Radoviş, Köprülü’de ‘-çi, -çu’; Koçana, Köprülü’de ‘-sı/-si’ ve Bulgaristan-Şumnu ile Omurtag’ta ‘-si’; Sarıova, Koçana’da ‘-sık,-sig’; Koçana’da ‘-go’ biçimleriyle isimlerden sonra da geniş bir kullanım alanına sahiptir. Batı Rumeli ağızlarında 1. çokluk şahısta -sık/-suk eklerinin yaygın olarak kullanıldığını literatür taramalarımızdan biliyoruz. Biz de Manisa Balkan göçmeni ağızlarında bu yaygın kullanımın şahidi olduk ve ilaveten Bulgaristan-Kırcaali’de duyulan geçmiş zamanın 1.teklik şahsında ‘-sım,-sim,- süm’ eklerinin kullanıldığını tespit ettik. Köprülü-Köseler’de gördüğümüz 1.çokluk şahıstaki -sık/-sı nöbetleşe kullanımı ilginçti ve çalışmalarımız ilerledikçe 2.- 3. şahıslarda da farklı şekillerin olduğunu gördük. Bu şekilleri, 2.teklik şahıs için, şimdiki zamanda -sı/-si(< -sın/-sin), geniş zamanda -si (< - sin); 2.çokluk şahıs için şimdiki zamanda -sını( < -sınız) ; 3. teklik şahıs emir çekiminde ise -sı /-su ( < -sın / -sun) biçiminde sıralayabiliriz. Literatür taramalarımızın (‘-sIk; -sIm’ ekleri dışında) bulduğumuz diğer ekler için aynı derecede cömert davrandığını söyleyemiyoruz. Bahis konusu ekler, haber kiplerinin 1. teklik şahsında ‘-çi; -si’, 3. teklik şahsında ‘-ci, -si, -su’, 1.çokluk şahsında ‘-si’, 3. çokluk şahsında ‘-cu, -çìk, -si’; emir 2. teklik şahıs çekiminde ‘-si’; ek fiilin 3. teklik şahıs çekiminde ‘-sig’ şeklinde ve fiil çekimlerinin dışında isimlere de ‘-çi / -çu; -sı / -si; -sık / -sig; go ’ şekilleriyle eklenebilmektedir. Bu makalede, öncelikle bulduğumuz örneklerin bir dökümünü yaptık. Ardından bu eklerin yapısı üzerinde durduk.Türkçedeki ‘çI/çU; şu’ pekiştirme edatı ile münasebetlerini tartıştık. Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2014-05-23 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2303-582X P Philology. Linguistics,PA Classical philology,PI Oriental languages and literatures,PN Literature (General) https://omeka.ibu.edu.ba/files/original/1c0ba72410de5017a833f00d38079b99.docx b3c6bd2bc098b819b6493c6f81c8465b https://omeka.ibu.edu.ba/files/original/7925516d61c82e461730c48e98981fd0.pdf 579f53b05a22828628eeae9dd76e4512 PDF Text Text MARINE LIFE AND OFFSHORE ENERGY Mustafa Alparslan Izmir Katip Çelebi University, Izmir, Turkey m_alparslan@hotmail.com Saniye Çulha Izmir Katip Çelebi University, Izmir, Turkey Fatih Aksoy Izmir Katip Çelebi University, Izmir, Turkey fatih.aksoy@ikc.edu.tr Kamil Emre Barış Izmir Katip Çelebi University, Izmir, Turkey k.emre_17@hotmail.com Keywords:Benthos, Offshore Energy, Biodiversity ABSTRACT In fact, there are two environmental processes of renewable energy, oil and gas companies must adhere to when trying to obtain permission for offshore exploration: a detailed assessment of the environmental area, called an Environmental Impact Assessment (EIA), which involves identifying potential threats and dangers to the natural nvironment and sea life, and a detailed plan of how to overcome any potential problems. As investment programme in marine energy increases in this time, there are challenges for new advanced technology to assess and protect the potential damage to marine wildlife.The energy system takes a look at a new passive acoustic monitor, designed to not only improve our understanding of the danger to sea life, but also provide offshore developers with the means to avert unnecessary damage. Development of research methods for studying benthos in tidal rapids: - routine characterisation of communities-biıdiversity - to measure productivity - input to ecosystem models - Determination of functional response of benthic organisms to energy changes through substratum modifications. - Habitat creation/modification/ enhancement potential - Biogeochemical researches of insitu nutrient dynamics/fluxes � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 2082 Title A name given to the resource MARINE LIFE AND OFFSHORE ENERGY Author Author ALPARSLAN, Mustafa CULHA, Saniye AKSOY, Fatih EMRE BARIS, Kamil Abstract A summary of the resource. Keywords:Benthos, Offshore Energy, Biodiversity ABSTRACT In fact, there are two environmental processes of renewable energy, oil and gas companies must adhere to when trying to obtain permission for offshore exploration: a detailed assessment of the environmental area, called an Environmental Impact Assessment (EIA), which involves identifying potential threats and dangers to the natural nvironment and sea life, and a detailed plan of how to overcome any potential problems. As investment programme in marine energy increases in this time, there are challenges for new advanced technology to assess and protect the potential damage to marine wildlife.The energy system takes a look at a new passive acoustic monitor, designed to not only improve our understanding of the danger to sea life, but also provide offshore developers with the means to avert unnecessary damage. Development of research methods for studying benthos in tidal rapids: - routine characterisation of communities-biıdiversity - to measure productivity - input to ecosystem models - Determination of functional response of benthic organisms to energy changes through substratum modifications. - Habitat creation/modification/ enhancement potential - Biogeochemical researches of insitu nutrient dynamics/fluxes Publisher An entity responsible for making the resource available International Burch University Date A point or period of time associated with an event in the lifecycle of the resource 2013-05-24 Keywords Keywords. Article PeerReviewed Identifier An unambiguous reference to the resource within a given context ISSN 2233-1565 https://omeka.ibu.edu.ba/files/original/5c2c50941c589517ed371d2bbf279e2b.pdf 06342da3ee622e88b57dc1acc0e3331b PDF Text Text 1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Market Dominance and Competitiveness in Banking Sector and an Analysis of Turkish Banking Sector with Comparison to EU Banking Sector Basak TANINMIŞ YÜCEMEMĐŞ Assist.Prof.Dr., The School of Banking and Insurance, Banking Department, Marmara University, Turkey, basakyuce@marmara.edu.tr Erişah ARICAN Prof.Dr., The School of Banking and Insurance, Banking Department, Marmara University, Turkey, erisaharican@marmara.edu.tr Abstract: It is of vital importance for the finance sector and its pioneering child, the banking sector, to boost and maintain competitiveness and market domination in a globalizing world. In the Turkish banking sector, a significant progress has been made with respect to making legal and institutional arrangements for regulatory and supervision authorities and implementing and auditing decisions taken within the context of harmonization with the EU. Due to increasing competition and rapid technological developments in the banking sector, financial products and services have been diversified and new strategies and policies have been implemented and rate of inflow of foreign capital has gathered momentum. It is noteworthy that the Turkish banking sector has an oligopolistic structure and it has ratios similar to the banking ratios of the developing countries that are EU members. Moreover, it is obvious that the Turkish banking system is more robust than transition economies. Keywords: Banking, EU, competitiveness Introduction Competition is the focal point of free market economy while competitiveness is an essential mechanism for boosting efficiency, effectiveness and social welfare. In addition, securing market dominance plays an important role in ensuring lucrativeness of businesses. The study focuses on the factors affecting competitiveness and market dominance of the banking sector that has entered international markets upon financial liberation and runs a structural comparative analysis between the Turkish banking sector and the banking sectors of the selected EU members countries grouped according to their economic development. 1. Theoretical Framework for Competitiveness and Market Dominance 1.1. Concepts of Competitiveness and Market Dominance and Factors Affecting Them In economic terms, competition can be defined as the ideal environment in which economic activities pursued by any person or firm are not restricted by other persons or firms and can been conducted in an effective manner. Competition is an endeavor for survival and maintaining and improving one's existence and it entails adopting a strategic mindset and adopting certain strategic analyses and conscious application rules. The ability of firms to influence the market and market prices is reliant on the level of competition in that market (Lipsey, Steiner&Purvis 1987). The higher is competition in a particular market, the less is the likelihood of individual firms to have any affect on that market and the prices that originate in that market. While price competition is the evident form of competition, non-price competition has come to be used more effectively today. In price competition, firms compete with each other by making discounts in the price of their products through several methods --monetary wages, profit, efficiency, changes in exchange rates, etc. In nonprice competition or product competition, firms try to distinguish their products from competing products on the basis of quality of the product or other services for consumption of the product(Kılınç 2008&Erkan 1987). For creating a good environment for competition, the following criteria must be fulfilled: • Entries to, and exits from, the market should be free. 64 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo • • • • • Firms should be free in conducting their trade and making deals. There should be an effective monetary system in place. Markets should be transparent. Buyers and sellers should have thorough knowledge of the market. Restrictions on trade should be abolished. Buyers and seller should act rationally to maximize their profits(Lachman 1999). Competition naturally gives rise to the concept of competitiveness. Competitiveness is a comparative measure and it specifies the position of sectors and countries with respect to each other. Competitiveness can be defined from two perspectives: at micro (firms and sectors) and macro (country) levels. In the former case, competitiveness signifies the ability of a firm to produce its products at lower costs and for lower prices compared to its rivals in the national or global markets; it also implies that this firm is capable of producing better quality and more attractive products and it can produce new products at lower costs and perform better in international trade. In the latter case, competitiveness refers to the ability of a county to compete with other countries with respect to quality and prices of its products, maintain a good balance of foreign trade, increase production, income and efficiency and improve living standards and employment in the country(Aktan&Vural 2004). There are two basic factors that affect competitiveness of firms: efficiency and cost advantage. In a sense, efficiency means obtaining higher output with lower input. In this regard, competitiveness can be defined as the ability to increase efficiency. Cost advantage is the ability to minimize the costs related to a product or service without degrading --or even by improving-- its quality. For Porter (1990), countries obtain competitiveness by using their resources optimally(Ucal & Gürsoy 2008). When the process of competitiveness is taken into consideration in transition from traditional economy to new economy, one can discern that competitiveness relies first on large production and low cost and then on product and market expansion, on quality and speed, and finally on value creation(Özkara1997 &Aktan and Vural 2004). 1.2. Competitiveness and Market Dominance in Banking Sector The finance sector and the banking sector need to boost and maintain competitiveness on a global scale in order to increase welfare. Market shares of banks (sector's rate of concentration) and barriers to market entry show the level of market power. The banks having monopolistic power in the banking sector will create loans in fewer numbers but with higher interest rates and with an immense volume while offering lower interest rates to deposits. This will in turn disrupt flow of capital to efficient areas, undermining capital accumulation and adversely affecting economic growth. Moreover, high volume loans will decrease portfolio diversification with added risk of crippling the financial structure of the bank. On the other hand, in a banking sector characterized by intense competition, interest rates will be lower for loans and higher for deposits, lowering capital costs and boosting economic growth. In oligopolistic markets, banks take into consideration possible reactions from other banks in deciding their interest rates, commission and other fees. Due to lack of communication in oligopolistic markets, prices are set more according to attitudes of rivals than those of customers(Tunay, Uzuner &Yiğit 1998). Increased competition leads to decrease in the number of reliable borrowers per bank, which in turn urges banks to conduct more thorough examination into loan applications. Banks tend to finance long maturity loans with short maturity deposits, thereby experiencing liquidity problems. Banks can avoid high credit risks only by maintaining more equity capital, applying capital adequacy requirements, using credit derivatives, decreasing interest risks, implementing low loan portfolios and using other risk minimizing measures. In the end, social welfare may deteriorate. Barriers to entry to the banking sector, cartel agreements and recently increased number of mergers and takeovers restrict competition. Measures that aim to create fair competition conditions in the banking sector are listed as follows: • Auditing authorities must be independent. • Entries to and exits from the sector must be free in order ensure that the number of the banks operating in the banking sector are optimal(Scoot & Dunkelberg 2008). • Objective criteria must be set view to preventing unfair competition by restricting entries to the sector -or mergers or acquisitions-- that might lead to creation of big bank groups. • Comprehensive legal arrangements -which encompass the entire financial sector, not only a banking law- must be implemented to ensure harmonization with the globalizing world(Scoot & Dunkelberg 2008). Neven's study (1999) showed that liberalizations that have been going on since 1980s have made a considerably salient impact on competition (Neven & Roller 1999). Recently, banks have started to operate under intense competition from non-sector financial organizations and financial markets due to the increased liberalization and integration of the world's financial markets. Increased competition has urged banks to engage 65 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo in insurance, private banking and asset management and other non-interest bearing operations (Hainz 2003). Banks are trying to adapt to the rapidly changing competitive environment through internal growth or merger and acquisition strategies with a view to benefiting from economies of scale. Many banks are seeking ways to diversify their income sources(Goddard, Molyneux, Wilson &Tavakoli 2007). However, when done between medium and big sized banks, mergers generally do not serve to increase efficiency because these banks are already making savings with their scales. In order to secure increase from scale savings, small banks should merge. Bikker and Haaf assumed that small scale banks operate on at local level while big banks are more competitive than other banks at the international level and medium sized banks can maintain a medium level of competition(Bikker & Haaf 2002). Moreover, the number of banks is treated as an indicator of competition level. Increase in competition at the banking sector leads to decreased cooperation(Hainz 2003). The banks having big market shares obtain noncompetitive income(De Jonghe & Vennet 2008). For Dick, in particular, big banks secure market dominance by seizing demand surplus through quality intensive services(Dick 2007). Any increase in market share results in a fall in brokering costs(Maudos & De Guevara 2007).Stability was found to be higher in the banking systems with higher concentration rates and fewer restrictive regulations. Thus, reasonable competition is preferred(Berger, Klapper & Aris 2008). When the European banking system having a strong structure is examined, it can be observed that recent technological developments, financial liberalization, ongoing economic and regulatory integration and impact of Euro transition have increased competition and effectiveness. On the other hand, since bank mergers and acquisitions decrease the number of rivals, this may have negative effects with respect to market domination(De Jonghe & Vennet 2008). 2. Structural and Comparative Analysis of Banking Sectors of Selected EU Countries vis-à-vis Turkey 2.1. Developments, Competitiveness and Market Domination in the Turkish Banking Sector in the Post2001 Crisis Era Post-2001 crisis recovery in the Turkish economy, increased economic stability, and the implemented anti-inflation program have positively affected the banking sector. Moreover, restructuring of the banking system has ensured that major structural problems which in the past created crises in the sector can be overcome. With consolidation and positive economic developments that occurred thanks to restructuring, the banking system has started to grow and reshaped its balance sheet structure. With increased demand for loans, the share of loans within assets has increased, and the share of securities portfolio with lower liquidity, and financial structure has been reinforced, and profitability performance has improved. As the Turkish banking sector has a big potential for growth and Turkey's EU membership process has accelerated, foreign capital has started to show increased interest in the sector and the direct investments by foreign investors in the Turkish banks and other financial organizations have increased. The banking law (dated 2006) that regulates and directly affects banking activities has been harmonized with the EU legislation to a great extent. New arrangements have been made with respect to determination of institutional management rules for banks and measurement of liquidity adequacy(TBB 2007). The year 2007 was a busy year for political and economic developments both in the country and in the international markets. With adverse developments around the world, no remarkable progress was seen in Turkey's EU membership process. 2.1.1. Market Structure in the Turkish Banking Sector In the banking sector where a rapid process of consolidation was seen with acquired and closed down banks after 2000, the number of banks dropped down to 49 in December 2008. The number of branches continued to increase. The branch and employee numbers have decreased in the period 2000-2003 due to the structuring schemes, but started to increase afterwards. Table 1. Bank and Branch Numbers 2001 2002 2003 2004 Bank Branch Bank Branch Bank Branch Bank Branch 61 6,908 54 6,106 50 5,966 48 6,106 Total 2005 2006 2007 Sep. 2008 Bank Branch Bank Branch Bank Branch Bank Branch 47 6,247 46 6,849 50 8,040 49 9,036 Total Source: Derived from the Turkish Banks Association (TBB), (May 2008), Bankalarımız 2007, and the TBB, (September 2008), 3 Aylık Banka Bilgileri Raporu. 66 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Table 2. Overall Structure and Efficiency Indicators of the Banking Sector Deposits/Employee Employee Employee Total Assets Total Loans Total Deposits Numbers (thousand Numbers/Bank Years Numbers (thousand TL) (thousand TL) (thousand TL) TL) Numbers 137,495 216,507,617 57,341,438 147,520,532 1,073 2254 2001 118,329 212,675,488 56,370,271 142,387,988 1,203 2958 2002 123,249 249,749,773 69,990,148 160,812,250 1,305 2465 2003 127,163 306,451,565 103,241,145 197,393,862 1,552 2649 2004 132,258 381,639,902 148,641,794 244,633,655 1,850 2814 2005 150,793 484,857,262 218,063,925 312,832,244 2,075 3278 2006 167,760 561,171,879 280,453,091 356,983,744 2,128 3355 2007 170,425 655,434,000 356,096,000 418,839,000 2,458 3478 Sep2008 Source: Derived from TBB, (May 2008), Bankalarımız 2007, and the TBB, (September 2008), 3 Aylık Banka Bilgileri Raporu. The total assets in the balance sheet of the banking sector increased to TL 655 billion ($565 billion) in September 2008 with a 16.8 percent increase. Increase in corporate and consumer loans supported growth in total assets(TBB 2008). Total credits in the banking sector reached TL 356 billion by the end of 2008, with the share of loans within total assets being 54.3 percent. The credit volume which was low to scale in the banking sector was a factor that reduced risk in the crisis period (Bilgin 2009). 26.4 percent of the total assets in the banking sector consist of securities. Since they are risk-free and liquid assets, the sector mainly prefer domestic government bonds (BDDK 2008). Table 3. Balance Sheet Structure of Banking System (%) 2001 2002 2003 2004 2005 2006 2007 Sep2008 na Assets in TL/Total Assets 53.6 60.7 63.2 67.7 66.2 71.2 71.9 na 49.6 56.7 59.9 64.3 62.4 66.7 66.8 Liabilities in TL/Total Liabilities na 42.1 50.7 55.2 63.2 61.6 65.1 66.0 Deposits in TL/Total Deposits na 42.4 53.7 63.5 70.5 72.7 74.9 74.0 Credits in TL/Total Credits 68.9 67.0 64.4 64.4 63.9 64.5 63.6 63.9 Total Deposits/Total Assets 10.5 8.4 8.2 9.0 11.0 11.7 10.5 10.9 Credits Received/Total Assets Source: Derived from TBB, (May 2008), Bankalarımız 2007-2006-2005-2004-2003-2002-2001, and the TBB, (September 2008), 3 Aylık Banka Bilgileri Raporu. The share of credits within total assets increased, due to falling interest rates after 2005, to 54.3 percent and the public sector borrowing requirement decreased, which caused the rate of conversion of deposits to credits to increase (85 percent), thereby boosting the contribution of the banking sector to the non-financial sector. Not only interest rates, but also creation of suitable maturity conditions were influential in this. Nonaccruing (delinquent) loans decreased in the post-2001 crisis restructuring process, but they started to increase slowly --particularly with respect to consumer and commercial credits-- due to economic uncertainties in 2008. Table 4. Asset Quality of Banks (%) 2001 2002 2003 2004 2005 2006 2007 Sep2008 35.0 40.5 42.8 40.4 36.0 34.7 31.3 28.7 Financial Assets (Net)/Total Assets 21.9 26.5 28.0 33.7 38.6 45.0 50.0 54.3 Total Credits/Total Assets 31.8 39.6 43.5 52.3 60.4 69.7 78.6 85.0 Total Credits/Total Deposits 19.9 6.6 1.4 0.7 0.5 0.3 0.4 0.5 Delinquent Credits (Net)/Total Credits 13.3 23.5 27.2 29.8 31.2 33.3 32.6 Consumer Credits/Total Credits Source: Derived from TBB, (May 2008), Bankalarımız 2007-2006-2005-2004-2003-2002-2001, and the TBB, (September 2008), 3 Aylık Banka Bilgileri Raporu. When the liquidity structure of the sector is examined, it can be seen that the share of liquid assets within total assets decreased over the years to 29.4 percent. This implies that the banks still choose to direct short term liabilities they assume not to liquid assets, but to the assets with lower liquidity. Table 5. Liquidities of Banks (%) 2001 2002 2003 2004 2005 2006 2007 Sep.2008 32.0 34.3 38.8 37.4 39.9 39.6 37.1 29.4 Liquid Assets/Total Assets na 75.1 80.5 84.3 74.8 65.3 62.4 47.6 Liquid Assets/Short Term Liabilities na 12.9 19.0 17.6 22.7 21.3 23.1 17.9 Liquid Assets in TL/Total Assets Source: Derived from TBB, (May 2008), Bankalarımız 2007-2006-2005-2004-2003-2002-2001, and the TBB, (September 2008), 3 Aylık Banka Bilgileri Raporu. 67 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Despite the rapid growth of equity, the capital adequacy ratio (Equity/Value at Credit + Market + Operational Risk) deteriorated. This was attributable to the inclusion of operational risk to the capital adequacy calculation as well as the growth in trade volume. The capital adequacy standard ratio decreased from 30.9 percent in 2003 to 17.7 percent in 2008. The net balance sheet position/equity ratio was -15.9 percent in 2008 (TBB 2008). Table 6. Capital Adequacy of Banks (%) 2001 2002 2003 2004 2005 2006 2007 Sep.2008 na 24.2 30.9 28.8 24.2 22.0 19.1 17.7 Equity/(value at credit + market + operational risk) 9.0 12.1 14.2 15.0 13.5 12.0 13.1 12.2 Equity/Total Assets na -6.3 -2.5 -4.5 -5.1 -13.5 -14.0 -15.9 Net Balance Sheet Position/Equity Source: Derived from TBB, (May 2008), Bankalarımız 2007-2006-2005-2004-2003-2002-2001, and the TBB, (September 2008), 3 Aylık Banka Bilgileri Raporu. 2.1.2. Concentration and Market Domination in the Turkish Banking Sector Due to the financial crises of November 2000 and February 2001, the ensuing restructuring of the banking sector and the unfavorable market conditions, many banks had to leave the sector, which created a hard-to-bear burden for the state because of the unlimited guarantees provided for deposits. As a result, the banking sector saw many changes, particularly stemming from consolidation efforts through mergers, and the share of the banks which are considered as large scale because of the deposits they command increased. As an explanation for this change, customer tendency toward opting for depositing money to big sized banks during a financial crisis as well as changes in the market shares of banks are suggested. In short, market dominance by big players increased. Consequently, there has been a rapid increase in concentration with respect to assets, credits and deposits since 2000 (Yayla 2007). When concentration and market dominance in the Turkish banking sector where the seven largest banks are the leaders and which has an oligopolistic structure are examined, one can see that the share in sector assets of the seven banks which are largest according to total assets was 62 percent in 2008 while the sector share of the ten largest banks was 85 percent. The share of the five banks which are largest according to deposits was 64 percent while the share of the ten largest banks was 83 percent. There was a drop in concentration for the ten largest banks. There was no change in concentration for the five largest banks in terms of credits while the concentration for the ten largest banks rose to 89 percent (TBB Sep 2008 & TBB May 2008). Table 7. Concentration in the Turkish Banking Sector (%) 2001 2002 2003 2004 2005 2006 2007 2008 Five Largest Banks 56 58 60 60 63 63 62 62 Total Assets 55 61 62 64 66 64 64 64 Total Deposits 49 55 54 48 56 58 57 57 Total Credits Ten Largest Banks 80 81 82 84 85 86 85 85 Total Assets 81 86 86 88 89 90 89 83 Total Deposits 80 74 75 77 80 93 83 89 Total Credits Source: Derived from TBB, (May 2008), Bankalarımız 2007-2006-2005-2004-2003-2002-2001, and the TBB, (September 2008), 3 Aylık Banka Bilgileri Raporu. The following Herfindahl-Hirschman Index (HHI) was used to study the market structure of the Turkish banking sector on performance and explain the concentration in the sector. Herfindahl-Hirschman Index Herfindahl-Hirschman Index (HHI) is used to measure the market concentration as part of a market structure analysis. It is defined as the sum of the squares of the market shares of all firms (banks) (Bikker 2004). If the total of market shares is expressed as 100, the HHI ranges between 0 and 10,000. Thus, - 0 - 199 (full competition market, 51 or more banks having equal market shares) - 200 - 999 (weak oligopolistic, 11 - 50 banks having equal market shares) - 1,000 - 1,799 (strong oligopolistic, 6 - 10 banks having equal market shares) - 1,800 - 10,000 (monopolistic, 1 - 5 banks having equal market shares) (Yetim & Gülhan 2005). 68 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Table 8. HHI Values (All Sector) 2001 2002 2003 2004 2005 2006 2007 Sep.2008 809.1 865.4 928.6 937.4 966.6 959.5 938.5 937.26 Total Assets 762.2 740.8 737.2 744.5 798.4 858.5 849.3 854.64 Total Credits 817.7 960.2 1041 1117.5 1093.2 1072.2 1063.9 1052.22 Total Deposits Source: Derived from TBB, (May 2008), Bankalarımız 2007-2006-2005-2004-2003-2002-2001, and the TBB, (September 2008), 3 Aylık Banka Bilgileri Raporu. According to the calculations, the asset and credit concentration in the Turkish banking sector were considerably close to each other while there was a greater concentration in deposits. The highest HHI value was 1,117.5 observed in the deposits market in 2004. With respect to assets and credits, the sector's HHI value was found to be below 1,000 in the period 2001-2008 examined, which implies concentration toward a strong oligopolistic structure. It was unconcentrated in terms of deposits until 2002, after which moderate concentration was observed. In this regard, the Turkish banking sector shifted toward a strong oligopolistic structure in terms of assets and credits through mergers and acquisitions. Table 9. HHI Values for Asset Sizes (Five Largest and Ten Largest Banks) 2001 2002 2003 2004 2005 2006 2007 Sep.2008 668.5 733.7 793.7 771.7 820.7 809.3 785.4 781.4 Five Largest Banks Total Assets 790.1 846.6 911.7 920.2 952.7 941.7 920.5 920 Ten Largest Banks 583.1 627.1 593.7 579.3 646,4 683.2 659.7 662.5 Five Largest Banks Total Credits Ten Largest Banks 646 685.8 677.8 701.4 768,3 828.2 821.8 828.5 683.4 827.9 882.1 914.2 919 894.9 883.7 857.9 Five Largest Banks Total Deposits Ten Largest Banks 805.6 948.7 1028.9 1106 1082.4 1039.9 1048.2 1038.7 Source: Derived from TBB, (May 2008), Bankalarımız 2007-2006-2005-2004-2003-2002-2001, and the TBB, (September 2008), 3 Aylık Banka Bilgileri Raporu. When the sector was examined with respect to five and ten largest banks, the situation was similar to the overall situation. Customers tend to opt for bigger banks in which they have confidence while smaller banks act more aggressive in the credit market to boost their market share. It can be said that smaller banks offer higher interest rates and take higher credit risks in order to secure higher amounts of deposits. This can be regarded as a behavior with some ethical risks. On the other hand, the reason why bigger banks have lower shares in the credit market is that the big banks operating in Turkey tend to keep domestic government bonds with zero risk in their portfolios. 2.1.3. Proposals for Increasing Effectiveness and Competitiveness in the Turkish Banking Sector The following table contains a SWOT analysis that may serve for better understanding the Turkish banking sector and its competitiveness, and the strengths, weaknesses, opportunities, and threats involved in the sector were depicted. Table 10. SWOT Analysis for the Turkish Banking Sector Threats Weaknesses - Restricted guarantee for deposits - Lack of qualified personnel - Increased transparency toward clients - Technological inadequacy - Lower interest rates and margins - Lack of funds for R&D - Non-banking competition - High costs - New technical standards - Low effectiveness and efficiency - Problems in adapting to changes in legislation - Inadequacy of competitiveness - Economic and financial uncertainty - Insufficient product and service diversification - Crisis periods and decreased effectiveness in the sector - Lack of independent audit - Increased interest from foreign banks - Insufficient transparency - Concentration Opportunities Strengths - Less restrictive controls on prices and products - Multiple technology products - Developing alternative resource creation - Increased risk, credit and liquidity management - Easer access to market - Larger local market - Increased client base knowledge - Easier cross-border entry - Confidence and prestige increase - Improved capability for attracting deposits - Young and dynamic population 69 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo - More non-price competition - Products and services with high value added - Cooperation and partnerships - Multiple technology products - High quality - Improvement of the sector - Restructuring of the public, private and Savings Deposit Insurance Fund (TMSF) controlled banks - Decreased restrictions to market entry and transition from oligopolistic competition to competitive environment thanks to legal arrangements, technological and information technology developments - Inflow of foreign capital - Rising rates of conversion of deposits to credits - Increased quality in product and service provision - Banks' finding new sources of income and adopting cost minimizing strategies and introducing organizational changes for expanding their customers' base and credit portfolios - Improved credit volume and more efficient use of resources Source: The SWOT analysis was made based on the assessments done within the context of the study. 2.2. Overall Structure of the EU Banking Sector, and its Competitiveness and Market Domination Globalization and financial liberalization in the world have triggered a fundamental change in the financial system in the EU. The integration of the financial system within the EU started, making markets homogeneous, fostering mergers among financial intermediaries, and resulting in new products and techniques. The Economic and Monetary Union (EMU) (January 1, 1999) accelerated the integration process in the financial system. Boundaries between national financial markets have largely lost importance (Yücememiş 2005). Due to the structural harmonization with the EMU interest rates, the profit margins and net interest margins of the banks in the EU have gradually decreased as was the case in Turkey. Thus, income structures of banks shifted away from interest incomes toward non-interest incomes. Today, big finance groups in Europe essential fail to secure a very rapid growth and high rates of profitability housing finance, consumer credits, credit cards and other areas in their respective countries because of the competitive pressures, market saturation, difficulties in increasing assets and decreasing incomes in domestic markets. This urges them to seek alternative markets and the countries whose finance groups that enter international markets become strong with respect to capital and earn experience at the international level. The next step for the European countries is to attain economies of scale with their operations, diversify their products, disperse risk, minimize costs and improve quality of their services. Increased competition in the EU finance sector has made it compulsory for firms to boost their effectiveness and efficiency. To maintain financial stability, effective supervision has emerged as an essential requirement. In addition, the sector should be able to satisfy customer demands, provide information and consultation services to customers, adapt to technological changes, and develop marketing strategies in order to attain stability (Yücememiş 2005). 2.2.1. EU Member Countries with Developed Economies Germany, Austria, Belgium, the Netherlands, Italy, France and the UK were picked for analysis from the EU member countries with developed countries. When the following tables are examined, one can see that concentration rates increased in these countries with developed economies through mergers and acquisitions, which led to serious structural changes with respect to new strategic moves. When the banks from the EU member countries acquire or merge with the banks in other countries, this leads to an increase in the overall assets within the union. Although there is not a big difference between the number of banks and branches in Italy and those in France, its asset size was almost half of France's. Table 11. Total Assets of the Banking System of Selected Developed EU Member Countries (€ million) 2001 2002 2003 2004 2005 2006 2007 6,268,700 6,370,194 6,393,503 6,584,388 6,826,534 7,120,805 7,562,431 Germany 554,528 586,459 635,348 721,159 789,770 890,747 573,384 Austria 776,173 774,330 828,557 914,391 1,055,270 1,121,905 1,297,788 Belgium 1,265,906 1,356,397 1,473,939 1,677,583 1,695,325 1,873,129 2,195,020 Netherlands 1,851,990 2,024,156 2,125,366 2,275,628 2,509,436 2,793,436 3,331,830 Italy 3,768,943 3,831,610 3,998,554 4,419,045 5,073,388 5,728,127 6,682,335 France 5,829,766 5,853,959 6,288,193 7,085,205 8,526,509 9,868,683 10,093,134 UK TURKEY (million TL) 216,507 212,675 249,749 306,451 381,639 484,857 561,171 Source: Compiled from European Central Bank, October 2006, EU Banking Structures and European Central Bank, October 2008, EU Banking Structures. 70 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Table 12. Concentration Index (HHI) of the Banking System of Selected Developed EU Member Countries (By Asset Size) 2001 2002 2003 2004 2005 2006 2007 158 163 173 178 174 178 183 Germany 561 618 557 552 560 534 527 Austria 1,587 1,905 2,063 2,102 2,112 2,041 2,079 Belgium 1,762 1,788 1,744 1,726 1,796 1,822 1,928 Netherlands 270 240 230 230 220 330 260 Italy 551 597 623 758 726 679 606 France 282 307 347 376 399 394 449 UK TURKEY 809.1 865.4 928.6 937.4 966.6 959.5 938.5 Source: Compiled from European Central Bank, October 2006, EU Banking Structures and European Central Bank, October 2008, EU Banking Structures. A comparison between developed countries and Turkey reveals that Turkey lags considerably behind these countries in terms of bank and branch numbers as well as total asset size. Moreover, it can be asserted that according to the concentration index, Turkish banking sector has moved toward the strong oligopolistic position and that it has lower rates of conversion of total deposits to credits compared to these countries. 2.2.2. Developing EU Member Countries Spain, Greece, Portugal and Finland were picked from among the developing EU member countries. It was found that in these countries, the number of banks decreased while the number of branches increased. This can be explained by the fact that with membership to the EU, mergers and acquisitions with the banks from other countries increased, thereby boosting concentration. This is also obvious from the increase in the total asset size. Table 13. Total Assets of the Banking System of Selected Developing EU Member Countries (€ million) 2001 2002 2003 2004 2005 2006 2007 1,247,998 1,342,492 1,502,861 1,717,364 2,149,456 2,515,527 2,945,262 Spain 202,736 201,608 213,171 230,454 281,066 315,081 383,293 Greece 298,428 310,370 348,691 345,378 360,190 397,123 440,144 Portugal 163,416 165,661 185,846 212,427 234,520 255,055 287,716 Finland TURKEY (million TL) 216,507 212,675 249,749 306,451 381,639 484,857 561,171 Source: Compiled from European Central Bank, October 2006, EU Banking Structures and European Central Bank, October 2008, EU Banking Structures. Table 14. Concentration Index (HHI) of the Banking System of Selected Developing EU Member Countries (By Asset Size) 2001 2002 2003 2004 2005 2006 2007 532 513 506 482 487 442 459 Spain 1,113 1,164 1,130 1,070 1,096 1,101 1,096 Greece 991 963 1,043 1,093 1,154 1,134 1,097 Portugal 2,240 2,050 2,420 2,680 2,730 2,560 2,540 Finland TURKEY 809.1 865.4 928.6 937.4 966.6 959.5 938.5 Source: Compiled from European Central Bank, October 2006, EU Banking Structures and European Central Bank, October 2008, EU Banking Structures. When these figures are compared with the figures related to the Turkish banking sector, it can be seen that the number of banks is lower than those in these countries while the number of branches is higher thanks to mergers with foreign banks. With respect to total assets, total deposits and total credits in the banking sector, there is no significant difference between these countries and Turkey. For this reason, it can be suggested that Turkey, being a candidate country, has economic structure similar to this group of countries and the harmonization of its banking sector can be considered as sufficient. 2.2.3. EU Member Countries with Transition Economy The Czech Republic, Hungary, Romania, Bulgaria, Poland and Estonia were selected from the EU member countries with transition economy. While these countries have different development levels and economic volumes, their banking sectors showed growth after they joined the union, as seen in the tables. Particularly in the Czech Republic and Hungary, economic development level was higher and banking sector 71 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo had investments in international markets before the 2008 crisis, and this boosted mergers and acquisitions with the banks in other countries and the number of banks decreased while the number of branches increased. In other countries, particularly in Estonia, the number of banks and branches quickly increased, which can be regarded as an economic advantage of being a member of the union. Table 15. Total Assets of the Banking System of Selected EU Member Countries with Transition Economy (€ million) 2001 2002 2003 2004 2005 2006 2007 78,188 79,232 78,004 87,104 100,902 114,878 140,004 Czech Republic 38,433 43,564 54,769 64,970 78,289 93,679 108,504 Hungary na na 15,000 23,200 35,400 51,911 72,095 Romania 13,224 17,447 22,302 31,238 na na 9,254 Bulgaria 116,044 112,174 141,571 163,421 189,739 236,008 133,476 Poland 4,372 5,221 6,314 8,586 11,876 15,326 20,603 Estonia TURKEY (million TL) 216,507 212,675 249,749 306,451 381,639 484,857 561,171 Source: Compiled from European Central Bank, October 2006, EU Banking Structures and European Central Bank, October 2008, EU Banking Structures. Table 16. Concentration Index (HHI) of the Banking System of Selected EU Member Countries with Transition Economy (By Asset Size) 2001 2002 2003 2004 2005 2006 2007 1,263 1,199 1,187 1,103 1,155 1,104 1,100 Czech Republic 856 783 798 795 823 839 892 Hungary na na 1,251 1,111 1,115 1,165 1,041 Romania na na na 721 698 707 833 Bulgaria 821 792 754 692 650 599 640 Poland 4,067 4,028 3,943 3,887 4,039 3,593 3,410 Estonia TURKEY 809.1 865.4 928.6 937.4 966.6 959.5 938.5 Source: Compiled from European Central Bank, October 2006, EU Banking Structures and European Central Bank, October 2008, EU Banking Structures. Comparison of these figures with the figures related to the Turkish banking sector indicates that there is no significant difference with respect the number of banks, but the number of branches is higher in Turkey thanks to mergers with foreign banks. In terms of total asset size, total deposits and total credits, Turkey is out in the lead ahead of the EU member countries with transition economies, and in this respect, it can regarded as ready for membership to the EU. As for the HHI, it can be seen that the Turkish banking sector is shifting toward the strong oligopolistic structure as regards the economic and sector size in Turkey. Conclusion Today, non-price competition has increased. Competitiveness can only be ensured via rise in efficiency, and income obtained from this increase may boost welfare in the country. Securing a competitive edge and/or increasing competitiveness will depend on effective and rational competition strategies developed. Increased market dominance results in increased concentration, which in turn decreases level of competition in the markets. Competition among banks undermines market power of banks, causing a decline in their profit margins. Under the increased competitive pressures from the non-sector financial organizations and markets, banks are urged to engage in insurance, private banking and asset management and other non-interest bearing operations. They try to adapt to the rapidly changing competitive environment through internal growth or merger and acquisition strategies. Despite the fluctuations and increased risk in international markets, the Turkish banking sector has managed to boost corporate and consumer loans. The public sector borrowing requirement has decreased, creating proper maturity and interest conditions and causing the rate of conversion of deposits to credits to increase, thereby boosting the contribution of the banking sector to the non-financial sector. Moreover, the Turkish banking sector has acted cautiously, preserving its profitability and increasing its non-interest income. Competition in the sector has led to a drop in cost and made resource distribution more effective and boosted efficiency and effectiveness. According to the Herfindahl-Hirschman (HHI), the concentration in the Turkish banking sector implies a strong oligopolistic structure where big banks are dominant in the market. However, in parallel to efforts for restructuring and integration with international markets, large scale institutional changes as well as changes to the products and services provided have been introduced. In this regard, the Turkish banking sector can be regarded as one of the most well-prepared sectors for harmonization with the EU, particularly with respect to openness to competition and legal arrangement. Nevertheless, on a global scale, the 72 �1. International Symposium on Sustainable Development, June 9-10 2009, Sarajevo Turkish banking sector is still small in terms of volume of assets, deposits and credits. The competitive environment in the sector fosters innovation and quality. Due to change in its assets and liabilities structure, the sector will continue to be vulnerable to liquidity, exchange and interest rate related risk. However, the Banking Regulation and Supervision Agency (BDDK) regularly issued guiding notices and explanations for the sector in 2008, and the sector seems to be capable of cautiously acting by the lesson it learned in the 2001 crisis. Yet, the Turkish banking sector may feel the heat from the high level of debts by non-financial economy and limited borrowing opportunities. If public authorities may implement policies for increasing production by bringing relief to non-financial sector and for warding off the pressure on the financial sector, this may result in a slight increase in economic performance and growth rate in 2009. References Aktan, C.A. and Vural, Đ.Y.(2004) Rekabet Gücü ve Rekabet Stratejileri, Publication no 254, Ankara: TĐSK Yayını. BDDK.(Sep. 2008).Finansal Piyasalar Raporu.No:11. Bikker, J. A. (2004).Competition and Efficiency in a Unified European Banking Market, Edward Elgar, Cheltenham. Bikker, J.A. and Haaf, K., (2002) Competition, Concentration and Their Relationship: An Empirical Analysis of The Banking Industry, Journal of Banking & Finance, Vol. 26, p. 2191-2214. Bilgin, T. (10.02.2009).Türk Bankacılık Sistemi 2008 Sonuçları ve 2009 Beklentileri, Text of Speech. De Jonghe, o., Vennet, R.V., (2008), Competition Versus Efficiency: What Drives Franchise Values in European Banking? Journal of Banking & Finance, Vol 32, Issue 9, pp. 1820-1835. Dick,A.A., (2007) Market Size, Service Quality And Competition in Banking, Journal of Money Credit and Banking, Vol. 39, pp. 49-81. Goddard, J., Molyneux, P., Wilson, J.O.S. and Tavakoli,M. (2007) European Banking: An Overview, Journal Of Banking & Finance, Vol. 31, pp. 1911-1935. Hainz,C. (2003), Bank Competition And Credit Markets in Transition Economies, Journal of Comparative Economics, Vol. 31, pp. 223-245. Kılınç, N., Yeni Ekonomi: Piyasa, Rekabet Ve Ar-Ge,, 1-15, http://paribus.tr.googlepages.com/kilinc.doc, accessed on 1.08.2008; and Erkan,H. (1987) Sosyal Piyasa Ekonomisi, Đzmir: Silm Ofset. Lachmann, W. (1999), The Development Dimension of Competition Law and Policy., UNCTAD Series on Issues in Competition Law and Policy. New York and Geneva: United Nations. Lipsey, R. G., Steiner, P. O. and Purvis, D. D.(1978) Economics, 8th Ed., New York: Harper & Row. Maudos, J. and De Guevara, J.F., (2007), The Cost of Market Power in Banking: Social Welfare Loss vs. Cost Efficiency, Journal of Banking and Finance, Vol. 31, pp. 2103-2107. Neven, D. and Roller, L.H. (1999), An Aggregate Structural Model of Competition in The European Banking Industry,” International Journal of Industrial Organization, Vol. 17, pp. 1059-1074. Özkara, B.(1997) Rekabet Modellerinin Değişimi ve Sanayi Đşletmelerinde Bir Araştırma, Çukurova University, ĐĐBF Dergisi, Vol. 7, Issue 1, pp. 47-71. Scott, J. and Dunkelberg, W.C., (May 2008) Competition for Small Firm Banking Business: Lender Actions, Market Structure, Worldbank Conference,pp.1-48. TBB,(May 2002,2003,2004,2005,2006,2007,2008). Bankalarımız 2001,2002,2003,2004,2005,2006,2007. TBB.(Sep 2008). 3 Aylık Banka Bilgileri Raporu. Tunay, K.B., Uzuner, M.T. and Yiğit,A. (1998) Ticari Bankalarda Kaynak Yönetimi, 1. b., Istanbul: Beta Yayınevi. Ucal, M. and Gürsoy, B. (2008) Đşletmelerde Rekabet Stratejileri ve Geleceğe Yönelik Politikalar, http://www.ikademi.com/stratejik-yonetim/760-isletmelerde-rekabet-stratejileri-ve-gelecege-yonelik-politikalar.html, accessed on 18.01.2008. Yayla,M.(2007). Türk Bankacılık Sektöründe Yoğunlaşma ve Rekabet: 1995-2005, Bankacılık ve Finansal Piyasalar, Vol. 1, Issue 1, BDDK, pp. 48- 51. Yetim, S. and Gülhan, O.(2005). Avrupa Birliği Tam Üyelik Sürecinde Türk Bankacılık Sektörü, Ankara: Xerox Doküman Merkezi. Yücememiş, B.T. (2005). Parasal Birlik, Avrupa Merkez Bankası ve Türkiye’ye Yansımaları, 1. b, Istanbul: Derin Yayınları. 73 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 142 Title A name given to the resource Market Dominance and Competitiveness in Banking Sector and an Analysis of Turkish Banking Sector with Comparison to EU Banking Sector Author Author TANINMIS YÜCEMEMiS, Basak ARICAN, Erisah Abstract A summary of the resource. It is of vital importance for the finance sector and its pioneering child, the banking sector, to boost and maintain competitiveness and market domination in a globalizing world. In the Turkish banking sector, a significant progress has been made with respect to making legal and institutional arrangements for regulatory and supervision authorities and implementing and auditing decisions taken within the context of harmonization with the EU. Due to increasing competition and rapid technological developments in the banking sector, financial products and services have been diversified and new strategies and policies have been implemented and rate of inflow of foreign capital has gathered momentum. It is noteworthy that the Turkish banking sector has an oligopolistic structure and it has ratios similar to the banking ratios of the developing countries that are EU members. Moreover, it is obvious that the Turkish banking system is more robust than transition economies. Date A point or period of time associated with an event in the lifecycle of the resource 2009-06 Keywords Keywords. Conference or Workshop Item PeerReviewed HB Economic Theory Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 3495 Title A name given to the resource MARRIAGE: MARRIAGE AS THE „BUSINESS“ OF MRS. BENNET'S LIFE AT THE END OF CHAPTER ONE. EFFECT OF THE „BUSINESS“ OF MARRIAGE ON FEMALE RELATIONSHIPS IN „PRIDE AND PREJUDICES“ Author Author STRIKA, Mersima Abstract A summary of the resource. One of the main themes in Jane Austen’s Pride and Prejudice is business of marriage. During and 19th century women were not financially independent and had no right to own property. Therefore the only choice left for them was to settle with a man of prosperity and substantial means of income. Over all plot of the novel deals with women’s their own or their mother’s attempt to is to find a man of means and to devise a possible way for a meeting between this husband candidate and woman herself. The women were in situation where they didn’t have much choice and where marriage was highly required as a sense of business. In this study, the business of marriages and female relationships as a result of those business marriages will be examined. Competence and jealousy among women as a result of business marriage is clearly seen in Pride and Prejudice and this study is focused on these themes as well, and it will be analyzed from different perspectives in this study. Keywords: Pride and Prejudice, Business marriage, Competence, Property, Jealousy. Date A point or period of time associated with an event in the lifecycle of the resource 2014 Keywords Keywords. Conference or Workshop Item PeerReviewed PE English https://omeka.ibu.edu.ba/files/original/a6a72dc735691e289290eed308fa1c61.pdf 019c5bb9e41802684388882992f3d312 PDF Text Text 1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo Mass Culture and Literature in Japan in the Interwar Period Ljiljana MarkoviĤ Filolońki fakultet Univerziteta u Beogradu ljiljana.markovic@fil.bg.ac.rs Marina JoviĤ DjaloviĤ Univerziteta u Beogradu, Serbia mvjovic@rcub.bg.ac.rs Abstract: The paper deals with the conditions influencing the emergence of mass culture in Japan in the interwar period. It describes the spread of mass media, statescript reform, appearance of the enbon and specifics of big publishing companies. Special attention is devoted to the characteristics of popular literature and the emergence of historical and detective novels as new genres. Key Words: Japan, mass media, elite and mass culture, popular literature Introduction The development of social and economic relations during the 20th century brought about changes in the creation and use of cultural values, resulting in the emergence of two types of culture: mass and elitist. Such a division is based on the views of Spanish philosopher Jose Ortega y Gasset that society is always a dynamic unity composed of two factors: minorities and masses.[4] The basic difference between elitist and mass culture lies in their commercial components. Elitist culture is an artistic product, which is created not only for commercial purposes, while mass culture is a commodity, which is produced for the market in an industrial process and earns profit through its sale to mass consumers. Cultural scientists and art historians differ in their views concerning the time when the elements of mass culture began to emerge. According to American sociologist D. White, the first elements of mass culture can be found in gladiatorial fights in ancient Rome because they attracted large audiences. T. Adorno holds that the prototype of modern mass culture emerged in England with the rise of capitalism (at the turn of the 17th to the 18th century). In his opinion, the novels from that period, like those of Defoe and Richardson, had a distinct commercial component. According to the modern view, mass culture first emerged in America at the turn of the 19th to the 20th century, with the spread of capitalism and its penetration into all spheres of life: economics, politics, administration, control, communications and human relations. The development of global market relations could not bypass the sphere of intellectual activity. The commercialisation of all social relations, associated with the fast development of the means of mass communication, brought about the emergence of mass culture. The notion of ―mass culture‖ does not give a true picture of the changes that occurred. The basic meaning of ―mass culture‖ is culture for the masses, culture intended for people or, in other words, popular culture. However, in essence, ―mass culture‖ is consumer culture, or the market opened to consumers of culture. The emergence of mass culture was accompanied by the creation of a new social class, which was termed ―middle class‖ and represented the consumer masses. In Western countries, the middle class became the basis of industrial society. On the artistic plane, mass culture performed special social functions, the most important being the illusory one – the introduction of man into the world of illusions and unfulfilled dreams. All this was coupled with the overt or hidden propaganda of the dominant ideology aiming at separating the masses from social reality, inducing conformism and adjusting people to the existing living conditions. Therefore, literature belonging to mass culture is characterised by light genres: detective and Western fiction, melodramas, musicals and comics. They form a simplified view of life, which reduces everything bad to psychological and moral factors, while at the same time making wide use of the launched axioms that ―a good deed is always awarded‖ and that ―love and faith (in God, in oneself) always win‖. However, despite being seemingly insubstantial, mass culture has a serious basis in the method of its functioning and not in its quality.[7] 753 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo The Specifics of The Emergence of Mass Culture in Japan Mass culture emerged in Japan after the Great Kanto Earthquake. In considering mass culture in Japan in the interwar period, Fujitake Akira points out that it owes its emergence to the creation of four crucial preconditions from the end of the Meiji period to the mid-Taisho period: - The emergence of the people as a force in the political and social sphere; The rise of capitalism during the First World War and postwar economic crises; The strengthening of Japan‘s international position over a condensed period of time; and The introduction and flourishing of foreign culture within the middle class.[3] During the 1920s, two events had a decisive impact on the formation of mass culture. The first was the Great Kanto Earthquake in September 1923, while the second one was the adoption of the Universal Male Suffrage Law (Futsu senkyo kisei domeikai), which gave rise to the pro-democracy movement in the Taisho period, and the Peace Preservation Law (Chian iji ho), which was adopted in 1925 as a counterweight to the mentioned democratic law. On 1 September 1923, the Great Kanto Earthquake destroyed Tokyo and Yokohama. Apart from its disastrous material consequences and human casualties, it had a great psychological impact on the Japanese people. In 1934, during his visit to France, Yokomitsu Riichi stated that it had the same impact on the Japanese way of life and culture as the First World War on the fate of Europe. He held that, after the earthquake that had destroyed the old culture, it was necessary to develop some other artistic values. He also believed that, after rejecting its past, a new Japan would emerge from the ruins and flames of Tokyo. By a new culture he primarily meant the literature and art of modernity, which abruptly began to spread in Japan, like in Europe, after the First World War.[5] The earthquake caused the enormous destruction of residential and commercial buildings. Over 80 per cent of all buildings in Tokyo and Yokohama were destroyed and over 100,000 people were killed. Tremendous material damage (over 5.5 billion yens) brought into question the overall Meiji modernisation project, revealing its uncertainty. Thus, Seiji Lippit quotes Uno Koji: ―This metropolis, built for more than 50 years during the Meiji and Taisho periods… vanished in smoke in a moment during the September earthquake.‖[9] Most printing houses and editorial offices were also destroyed, so that many avant-garde, proletarian, women‘s, civil and other journals ceased to come out (Shinko Bungaku, Aka to Kuro, Tane mako hito). In 1925, the government adopted the new Public Order Preservation Law in order to provide additional legal grounds for sanctions against radical activities, which affected the further work of Marxist-oriented societies, including anarchist-minded groups of poets.[8] The great destruction of old Edo enhanced the feeling of distance from the past because it did not exist any more. Thus, Western technology was adopted in its entirety and implemented in the rebuilding of the city within a few years (formally – until 1930). This new ―Westernisation‖ helped build the city, but that was not old Tokyo any more. It was a fully urbanised, modern new city, which completely adopted the Western principles. Apart from the reconstruction of productive industries, publishing activity was also modernised, thus creating a scope for the spread of mass culture and popular literature. Owing to the import of fast rotating machines, the circulation of commercial periodicals and non-periodicals sharply increased. Thus, for example, from 1920 to 1924, the circulation of the newspapers Osaka Shinbun and Tokyo Shinbun rose from 600,000 to 1,000,000 and from 350,000 to 710,000 respectively. This was also contributed by the script reform carried out by the Ministry of Education.[2] In addition, the publishing companies Asahi and Mainchi seated in Osaka and Tokyo, which published the high-circulation dailies Asahi Shimbun and Mainichi Shimbun, introduced special systems for fast information transmission (telegraph and air mail), thus considerably improving information gathering and transmission. Thanks to the actualisation of information, the press was transformed from ―opinion journalism‖, as it was since 1910, into ―mass journalism‖, which was explained by the President of the Mainichi publishing company, Mojoyama Hikoichi by saying that ―newspapers are a commodity‖.[3] The content of newspapers also changed. It became diverse and, apart from information and advertisements, included novels in instalments and comics, which were later to develop into a very popular genre in Japan. This considerably increased the number of middle-class subscribers, so that the circulation of some newspapers reached one million. Journals began again to be published under their old or new names. The best-known journal of general character was ―King‖ (Kingu), whose first issue, published in 1925, was sold in 750,000 copies. Such a high circulation was largely due to a well-organised advertising campaign which, inspired by American ones, was conducted by all publishing companies. This practice was also adopted in book publishing. In 1926, low-priced (oneyen) paperback series began to come out (the enbon programme). The first series consisting of 50 volumes was published by the Kaizosha publishing company under the title ―Complete Collection of Modern Japanese Literature‖ (Gendai nihon bungaku zenshu). It was followed by ―Complete Collection of World Literature‖ (Sekai bungaku 754 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo zenshu), launched by the Shinchosha publishing company in 1927. The series also consisted of 50 volumes. A quote from the advertising message shows the way in which the reader is approached: ―`We enable you to read books at the lowest possible prices!‖ With this slogan our company carried out a great revolution in the world of publications, liberating art from the privileged class and giving it to the masses.‖[2] An aggressive advertising campaign and the low prices of newspapers, journals and books contributed to the democratisation of culture, increase in the reading public and, thus, an increase in the cultural level in general. Apart from King, other weekly journals also began to come out. In 1922, Asahi and Mainichi began to publish Shukan Asahi and Sande Mainichi respectively. The following year, Asahi began to publish the illustrated weekly journal Asahi Gurafu. Iwanami Shoten and Kondasha Ltd. also began to publish such publications. The publishing company Iwanami Shoten was established in 1913 by Iwanami Shigeo, who evolved from an antiquarian book seller into a successful publisher of novels, scientific journals and paperback series. His success encouraged many leading scholars to contribute to his publications. With the series entitled ―Iwanami Library of Classics‖ (Iwanami Bunko), launched in 1927, the company definitely shifted to serious, elitist intellectual culture. Such an activity became known as ―Iwanami Culture‖. A series of articles on Japan‘s capitalism (Nihon shihon shugi hattatsu shi koza), published by the company since 1932, became the Marxist forum before the Second World War. In 1938, the company also began to publish a series of articles on current issues, like the Iwanami Shinsho series.[1] The Kodansha publishing company is one of the most important companies of its kind in Japan. Its predecessor was the Greater Japan Oratorical Society (Dai Nippon Yuben Kai), which was founded by Noma Seiji (1878-1938) in November 1909. In February 1910, he started to publish the periodical ―Oratory‖ (Yuben) under the motto ―The judiciary will suffer if oratory gets worse‖. One year later, Noma founded another publishing company, Kodansha, with the aim of publishing less serious journals. The first was Kodan kurabu, which was followed by several other journals published during the period 1914-1923. In 1925, he began to publish his best known journal ―King‖ (Kingu). That same year, Noma merged his two publishing companies into one company, Dai Nippon Yuben Kai Kodansha, which published nine Kodansha journals. In the interwar period, they covered 70% of the Japanese journals market.[6] The publications of Iwanami Shoten and Kodansha Ltd. had a great impact on the Japanese patterns of thinking and behaviour in the interwar period. The journals published by Iwanami Shoten were intended for the elitist (intellectual) pubic, while the publications of Kodansha appealed to the middle class and provided a special impetus to the formation of mass culture in Japan. Due to the difference between these influences, they are called ―Iwanami Culture and ―Kodansha Culture‖.[3] Radio was another means of disseminating mass information. Radio Tokyo began broadcasting in 1925. The basic characteristic of radio broadcasting was monopolism, since three state companies, established in Tokyo, Osaka and Nagoya in 1925, later merged into one state company – Japan Radio Corporation (Nippon housou kyoukai, NHK), thus consolidating the work of all existing radio stations. It retained its monopolistic position until 1951 when, under the American influence, private commercial radio stations were opened. Therefore, radio broadcasting was initially used to promote the state‘s interests and later the military regime. The period 1920-1930 was characterised by modern literature and a significant rise of the proletarian movement and its literature. The development of material civilisation during the 1930s brought fast progress in mass communication technology which, in the aftermath of the depression, encouraged the atmosphere of eroticgrotesque-nonsense (ero guro nansensu). Labour force urbanisation linked to the development of Japanese capitalism and increased national coverage by the mass media diminished the conflict between the rural provinces and urban Tokyo, which was the main recipient of mass culture. Opposition to these trends emerged in the form of a fascist movement,257 which advocated the imposition of military rule. The coming into power of the military regime in 1937 marked the end of mass culture in the interwar period. During the 1920s, mass literature of foreign origin, especially American and European one, included detective and romance novels, fantastic fiction and historical adventure novels, which did not exist in Japanese mass literature (taishu bungaku) on such a scale. Popular literature emerged as an entertaining genre in the Taisho period. It was published in high-circulation newspapers and journals, especially after the establishment of large and influential publishing companies and the emergence of new mass-scale non-fiction. Some authors who were previously associated with ―pure literature‖, like Kikuchi Kan and Kume Masao, also began to write for a broader public. At the same time, authors of historical novels adopted new topics in popular literature. The development of mass culture was accompanied by the rise of popular literature, including historical novels, detective stories and the beginnings of science fiction. The best known historical-fiction authors were Shirai Kyoji and Naoki Sanjugo, while the best known writers of detective stories were Edogawa Rampo, as well as Shrai 257 It is necessary to explain the notion of fascism in Japan. In essence, there is a distinction between the notions of fascist regime and fascist movement. A fascist regime implies a totalitarian political structure based on ideological monism, in which absolute power is concentrated in the hands of its leaders. On the other hand, a fascist movement is an opposition nationalist movement which is usually terrorist in character and aspires towards a dictatorship in one form or another. In Japan, it was the question of a fascist movement, while Germany and Italy first had a fascist movement and then a fascist regime. 755 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo and Naoki. In 1925, they founded Club 21 and, in January next year, began to publish the journal ―Popular Literature‖ (Taishu bungei). In May 1927, the Shirai publishing company began to publish mystery and detective stories as the enbon series (Gendei taishu bungaku zenshu). Under the strong influence of American culture, Japanese mass culture assumed a number of characteristics common to mass culture in other countries. However, like many times in its history, Japanese culture absorbed only those foreign elements which were suited to the Japanese mentality, thus preserving its specifics. This especially refers to Japanese mass literature, while the culture of entertainment and leisure was adopted without any special critical framework, particularly by young people, since it was something that did exist in Japan before. This especially became evident after the Second World War. The best known genres of this literature in the interwar period included historical and detective novels. The main characters in historical novels were the samurai who, at the beginning, were depicted as ideal figures, protectors of their lord and his family. Later on, under the influence of American Wild West literature, they were increasingly portrayed as robbers and bandits, who used to kill men and insult women. The best known novel of this kind was Nakazato Kaizan‘s novel ―Daibosatsu Pass‖ (Daibosatsu Toge). Detective novels were very popular because they offered widely varied entertainment. Apart from mystery, they also included fantasy, grotesque and horror. Only after the Second World War, the detective genre became confined to the European framework. Detective fiction was published not only in daily newspapers, but also in the specialised journal ―New Youth‖ (Shin seinen), which was published by Hakubunkan during the period 1920-1950. It was an entertaining journal specialising in detective stories. The best known author of this genre was Edogawa Rampo (1894-1965).258 He published his first story ―The Two-Sen Copper Coin‖ (Nisan doka) in the journal Shin seinen, in 1923. It was followed by ―The Psychological Test‖ (Shinri shiken, 1925) and ―Watcher in the Attic‖ (Yaneura no samposha, 1925), thanks to which he assumed the leading position in this genre. His best known story from this period is ―Beast in the Shadow‖ (Inju, 1928). He later tried to switch to crime fiction with the mixture of the erotic and the grotesque, but his stories ―The Spider Man‖ (Kumootoko, 1929-30) and ―The Golden Mask‖ (Ogon kamen, 1030-31) were not so successful. Thus, he returned to detective fiction and, in 1936, published the novel ―The Mystery Man of Twenty Faces‖ (Kaijin nijumenso, 1936), which is considered one of his best works. After the war, he published the anthology ―Forty Years of Detective Stories‖ (Tantei shosetsu yonjunen, 1961) in which he presented the development of the detective fiction genre.[10] Literary critic Chiba Kameo dealt with the specifics of popular literature in his essay ―The Essence of Popular Literature― (Taishu bungaku no honshitsu), published in the journal Chuo koron in July 1296.[11] In considering the essence of popular literature, Chiba gave three fundamental characteristics to this literature: romantic, instructive and entertaining. The first characteristic is contained in historical, detective and entertaining fiction, which directs the reader‘s sentiment toward rightfulness or an ideal world that can never be attained. As for the second characteristic, Chiba points out that popular literature appeals to human emotions and not to reason. The third characteristic implies that one must devote great attention to the way in which entertainment is offered to the reader – this must be done without sensationalism and vulgarity. In Chiba‘s opinion, this requires a special skill. Mass culture in Japan in the interwar period created a basis for the development of mass culture after the Second World War, when Japanese popular literature adopted all genres of American light literature and culture, including detective novels, westerns, melodramas and musicals. However, a specific, purely Japanese genre – manga or comic books with light, serious and educational topics – also began to be developed. Conclusion The emergence of mass culture and popular literature was a major characteristic of this period. It was important for modern literature and avant-garde poetry not only because it increased readership and the number of sold copies, but also because of the possibility to highlight their role in society, literature and politics. In contrast to ―popular literature―, this literature declared itself to be ―pure literature― (jun bungaku). Mass culture is not only the characteristic of Japanese society; it is part of world culture. Its roots lie in the aspiration to turn man‘s spiritual activity into a commodity and impose it on consumer society under the mass media influence. References 258 His real name was Hirai Taro. He also used the pseudonym Edogawa Rampo, which is a Japanese rendering of Edgar Allan Poe‘s name. 756 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo Arase Yutaka (1983), ―Iwanami Shoten―, Kodansha, Vol. 3. Gardner W. (2006), ―Advertising Tower: Japanese Modernism and Modernity in the 1920‘s―, Harvard University Press. Fujitake Akira (1967), ―The Formation and Development of Mass Culture―, Developing Economies, 5, 4. Jose Ortega y Gasset (1972), ―Las deshumanizaciñn del Arte e Ideas sobre la novela― (1925), Princeton University Press. JoviĤ DjaloviĤ Marina (2008), Doctoral Dissertation. Kakegawa Tomiko (1983), ―Kodansha Ltd―, Kodansha, Vol. 4. Kurt Lang, Gladys Engel Lang (2009), ―Mass Society, Mass Culture, and Mass Communication: The Meanings of Mass―, International Journal of Communication, 3. Lippit, Noriko Mizuta (1980), ―Reality and Fiction in Modern Japanese Literature―, MacMillan Press, New York. Lippit, Seiji M.(2002), ―Topographies of Japanese Modernism―, Columbia University Press. Satoru Saito (2000), ―Japanese Popular Literature―, Columbia University. Yasuko Claremont (2008), ―Shinseinen in the interwar period (1920-30)―, 17th Biennial Conference of the Asian Studies Association of Australia, Melbourne, 1-3 July 757 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 111 Title A name given to the resource Mass Culture and Literature in Japan in the Interwar Period Author Author Marković, Ljiljana Jović Djalović, Marina Abstract A summary of the resource. The paper deals with the conditions influencing the emergence of mass culture in Japan in the interwar period. It describes the spread of mass media, statescript reform, appearance of the enbon and specifics of big publishing companies. Special attention is devoted to the characteristics of popular literature and the emergence of historical and detective novels as new genres. Date A point or period of time associated with an event in the lifecycle of the resource 2011-05 Keywords Keywords. Conference or Workshop Item PeerReviewed P Philology. Linguistics https://omeka.ibu.edu.ba/files/original/0f29278c8d8a167a7a3d5690e7b53d5a.pdf e758a973d6268014235b6f2f0c241546 PDF Text Text 1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo Mass Media (TV and Radio) News and Language Learning Taher Bahrani Taher_bahrani@yahoo.com Faculty of language and linguistics, University of Malaya Tam Shu Sim tams@um.edu.my Faculty of language and linguistics University of Malaya Abstract: Two important issues regarding the selection and preparation of TV news for language learning are: the content of the news and the linguistic difficulty. Content is described as being specialized or universal. Universal contexts are likely to be more comprehensible than specialized contexts. As for the linguistic difficulty, it consists of acoustic, lexical/syntactic and text-type difficulties. With regard to texttype, four types of spoken and visual elements are identified: symbolic, referential, schematic, and iconic. Audiovisual texts with greater iconic combinations are likely to be more comprehensible for language learning. Key words: mass media, news, selection, content, linguistic difficulty Introduction In the last few years, the output of TV news has exploded both in English and non-English speaking countries such as Iran and Japan. For example, in Iran, there are two channels broadcasting English news. One is Press TV which is broadcasted 24 hours 7 days a week in English and IRINN which is broadcasted some hours in English every day. In Japan, the satellite channel NHK 1 alone provides more than 24 hours of TV news in English each week, including the news bulletins of CNN, BBC, etc. TV news programming in English is not only a vast and growing language learning resource which provides meaningful opportunities for non-reciprocal listening but a vital and immediate alternative source of information. The pedagogical and informative aspects of news broadcasts in English may therefore often and dramatically intersect. Although much has already been written about the pedagogical values, selecting and using mass media technologies such as video, film, and CDs in general in the second language classroom (Cooper et al., 1991; Joiner, 1990; Rubin, 1995; Stempleski & Arcario, 1992), less research has focused on the pedagogical problems of selecting and presenting TV news (Brinton & Gaskill, 1978; Cooper, 1996; Gruba, 1997; Meinhof, 1998). Regarding the increasing accessibility of TV news in English, this paper focuses on the criteria for selecting TV news stories to be used as a pedagogically valuable material for language learning. This paper mainly aims at the selection criteria for TV news stories. The two main categories for assessing the pedagogical value of TV news are: a) background knowledge or content schemata and b) the linguistic difficulties of processing combinations of visual and auditory messages This research is based upon a course I have taught in current affairs to a group of Iranian University EFL students, including both males and females, of intermediate proficiency (N=30). Although these students have low self-confidence with regard to their abilities to listen to authentic materials such as TV news, they are very much motivated and have a high degree of interest in this kind of authentic materials. In terms of understanding TV news, factors such as interest and motivation may be more important than linguistic ability for native and non-native speakers alike (Wodak, 1987). The class met 4 hours per week for 3 months in a foreign language context. Moreover, the responsibility for selection of materials was on the teacher. 1161 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo TV and radio news in language learning Exposure to mass media news, for example, TV and radio news, the pedagogical value of such materials, and the possibility of using TV and radio news at all levels of EFL/ESL settings in order to enhance different language skills have been the focus of so many studies. In a research conducted by Brinton and Gaskill (1978), the effect of listening to TV and radio news on improving EFL students‘ listening comprehension was studied. Brinton and Gaskill (1978) argue that using TV and radio news utterances as teaching material has proved effective on improving listening comprehension of EFL learners having difficulty in dealing with comprehending news utterances. However, Brinton and Gaskil do not mention any thing about the kind of news to be selected. A similar study which focused on using TV news to improve listening proficiency was also conducted by Poon (1992). In addition to the above mentioned studies, Baker (1996) also focused on the pedagogical value of TV news in EFL classes and listening comprehension. According to Baker (1996), TV and radio news can help EFL students improve their listening comprehension. The use of fast speech such as those of TV and radio news in EFL/ESL classrooms has also been studied by some other scholars. In this regard, Cauldwell (1996) conducted a study aiming at discovering the relationship between direct encounters with fast speech such as TV and radio news and teaching listening to EFL students. Accordingly, students may have some problems copping with fast speech at first. However, EFL students can diminish these problems and improve their listening through great amount of exposure to fast speech. Another short study conducted by Mackenzie (1997) also highlighted the possibility of using TV and radio news reports at all levels of EFL learning. The study rejected the assumption that because the reporters speak too fast, the content is too complex, and the vocabulary is too difficult, TV and radio news cannot be used at lowest levels of EFL situations. Mackenzie study included some techniques to be used by the teachers while trying to use news in their classes. As the matter of fact, Mackenzie did not say anything about criteria for the selection of news. What he focused on was the use of fast news at all levels with different techniques. Regarding proficiency and comprehension of television and radio news in a foreign language, a research by Berber (1997) highlighted the point that through enough exposure to these materials, students can easily cope with the comprehension of such materials. Cabaj and Nicolic (2000) also noted that a great amount of exposure to TV and radio news could help students to cope with TV and radio news broadcasts easier. Moreover, through exposure to TV news and radio programs students acquire the knowledge, structures, strategies, and vocabularies they can use in everyday situations. In the same line, a study was conducted by Bell (2003) focusing on the pedagogical value and informative aspects of TV and radio news broadcasts in EFL settings. He considered background knowledge or content schemata, formal schemata, and linguistic difficulty as three broad categories for selecting any kinds of TV and radio news stories for the EFL classrooms. However, Wetzel et al. (1994), in their study, found that TV news is not always helpful in comprehension. In short, the majority of the aforementioned descriptive and experimental works have been conducted on the pedagogical value and the effect of exposure to TV and radio news genre on promoting different language skills especially listening comprehension but none of them has specifically focused on the discovering the nature of the news to set a clear criteria for the selection of the news. This is one of the initial reasons to carry out the present study. Research design The research design of this paper is in the tradition of the hermeneutic paradigm of naturalistic and action research (Freeman, 1998). It focuses on two modes of enquiry. First, by introspection, it seeks to make explicit the process of material selection by the teacher-researcher. This is seen as part of an ongoing process in teacher research to articulate and represent what teachers know and are learning through their work in the classroom. Second, the paper reflects upon the use of selected materials in the classroom within the framework of action research. Content Schemata Research in cognitive science suggests that knowledge is organized in the form of schemata (Rumelhart, 1980). Weaver (1994, P.18) defines a schema as ―an organized chunk of knowledge or experience, often accompanied by feelings‖. According to Bell (1991), Schemata aid the interpretation 1162 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo of both linguistic and non-linguistic sensory data by providing a context in order to predict meaning and fill in missing information. In second language reading research, Carrell (1983, 1984, and 1987) has highlighted the connection between comprehension and background knowledge established in first language research. Non-native readers are often unable to make the necessary connections between text and background knowledge and so tend to rely more on linguistic cues than background knowledge. In L2 listening research, several studies have noted the link between topic familiarity and comprehension (Chiang & Dunkel, 1992; Long, 1990; Tchaicha, 1996). The practical implication of studies of comprehension and background knowledge for the teaching of listening comprehension has been to stress the importance of activating appropriate schemata in pre-listening activities. Here, this paper is concerned with how schema theory informs the selection of TV news items and how schemata interact with context. Exogenous context and endogenous context Exogenous contexts require prior knowledge. The nature of this prior knowledge may be specialized or universal. Specialized contexts such as Iran, Japan, or Iraq require such massive prior knowledge that even many native speakers may lack the appropriate schemata. Endogenous contexts, such as news film of a sporting incident or natural disaster, require little or no prior knowledge in that they create their own contexts (although, of course, learners will need the appropriate vocabulary to be able to talk about what they see happening in the video sequence). In other words, the visuals speak for themselves. Of course, individual TV news items may be made up of degrees of exogenous and endogenous contexts. According to Cooper (1996), episodic news stories are dependent on knowledge of the previous events in the story and so put special conditions on comprehension. Similarly nonepisodic news items, while not requiring knowledge of a prior story, may still require large amounts of background knowledge. In news items which required more declarative knowledge, the media literacy of individual students became a more important factor in understanding. From this discussion, certain pedagogical implications for material selection emerge. Endogenous contexts are likely to be the most exploitable type of news story in the language classroom, but such contexts are likely to account for a small fraction of the news items in any one bulletin. TV news items with universal exogenous contexts, though somewhat less accessible to students, are likely to be far more available. A key factor is the degree to which students can empathize with such items through their own experiences, for example having a bike accident or having a bike stolen, etc. In this case, the participants in this study showed their interest in TV news items with universal exogenous contexts more. It is important to remember that schemata are socially constructed and therefore often culturally specific mental categories into which events and individuals are sorted. Although Japanese and Iranians may share the mental category of carry-on luggage, the content of that category may vary. Carry-on luggage in Iran may be stereotypically associated with the frustration of flying brought on by both the need to carry on as much luggage as possible and the inadequacy of the space provided. From the Japanese perspective, carry-on luggage may be considered a convenience and passengers feel obliged to allow others space for their carry-on items. News items with imputed universal appeal may therefore facilitate understanding not only with regard to the discourse under study but on the larger level of cross-cultural communication. The news, therefore, provides a particularly illuminating view of the stereotypical categories and preoccupations of a particular culture. The selection and treatment of news items reflects shared stereotypes of media producers and consumers of news within a particular social context; news may be seen as a creation of a journalistic process. It is suggested that TV news items with universal exogenous contexts are likely to be the most available and the most accessible to students. Yet before such items are used in the classroom their 1163 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo appeal needs to be tested through such devices as questionnaires. And during their presentation their value as newsworthy items in the culture of origin needs to be made explicit. This was actually done in this research and related news episodes were selected based on the participants of this study. As the matter of fact, at the end of each session, the researcher asked the participants about their favorite topic for the next news item to be selected and prepared for them. Linguistic Difficulty Linguistic difficulties are defined here under three headings of text characteristics: acoustic, lexis/syntax and text-type (which include both visual and linguistic text):  Acoustic: The acoustic characteristics of a text include speech-rate, pause phenomena, hesitation, stress and rhythmic patterning. 1. Lexis/Syntax: TV news as a whole and news items in particular contain a high degree of redundancy. Redundancy in input is generally understood to aid second language comprehension (Chaudron, 1983; Chiang & Dunkel, 1992). Chiang & Dunkel found that repetition of constituents, paraphrase, and synonyms work best with higher levels.  Text Type: Narrative vs. non-narrative text: Research into native speaker comprehension of TV news suggests that viewers experience substantial comprehension and recall difficulties (Bell, 1991). Stories with a clear narrative story line tend to be processed easier than those without, but for the most part TV news is made up of non-narrative text. In L2 listening comprehension research, Shohamy and Inbar (1991) found that when they compared the relative comprehensibility of three text types: TV news broadcast using a prewritten, edited monologue, and an interactive consultative dialogue, the news item was the most difficult to process. Brown (1995) has shown that narrative texts are easier for L2 learners to listen to and recall than expository texts are, and further, events described in chronological order are easier to recall than narratives with disrupted sequences or flashbacks. This suggests that the general trend of network American TV news towards dramatic framing of news stories, news as ―infotainment‖ and the conversationalization of TV news discourse are likely to have beneficial effects for L2 processing. A. The union of spoken and visual texts: Perhaps one of the least understood features of TV news broadcasts is the combination of words and pictures, especially which has primacy in the process of decoding. The established semiotic view exemplified by Gruba (1997) is to argue for the dependence of images on verbal text or, to be more exact, the narrowing down of the multiplicity of imagistic interpretations by the spoken text. As Gruba (1997) notes, such a view appears to be rather simplistic. First, distinguishing between what we hear and what we see is not necessarily a difference between words and pictures but a difference in the way we receive the information though our eyes and ears (Meinhof, 1998). Inscriptions, captions, posters, diagrams for example appear on the visual track while the soundtrack may carry background noises and music as well as the spoken text. Second, it may be better to conceive of words and pictures creating a whole message unit rather than separate entities. Certainly, there will be instances when the linguistic text drives the comprehension of the visual input and there will also be instances where the visuals are dominant, but for the most part comprehension will depend on the interaction between the two. Gruba notes: Visual elements do not ‗merely‘ provide support for verbal elements: they are better thought of as an integral element in videotext that interplays with verbal elements to influence a listener‘s emerging interpretation. (1997, P.134). Written language is also considered a notational symbol but the degree of unambiguity between the symbol and the concept referred to is weaker. On the other end of the continuum, nonnotational symbol systems like film, video and abstract art may suggest multiple meanings that may not consistently refer to specific concepts. Meinhof (1998) has identified three ways in which text and images can be said to interrelate: overlap, displacement, and dichotomy. When words and pictures overlap they are identical or in a 1164 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo metonymic relation. Text and images which can be described in terms of displacement refer to different action components, such as the cause and effect of an action. The images may be of the effects of an explosion while the spoken text discusses the causes. Other examples of displacement are the way that images can be used thematically to illustrate the spoken text or to comment on and draw inferences from the spoken text. Meinhof gives the example of a speech asking for more money to fight drugs with accompanying visuals of police raids and treatment centers, which make comments on how that money might be spent. And finally texts and images may be dichotomous where they refer to different actions altogether–the input from the visual channel may be unhelpful, distracting, or misleading. Consequently, the degree of fit between words and images is very important factor regarding comprehension. In a research into the comprehension of video materials by native speakers, Wetzel et al. (1994) conclude that whereas audio-video material is on the whole more comprehensible than audio material, in the area of TV news the visual element is not always found to be a help to comprehension. Information recall from the news seems to be positively affected by the degree to which the auditory and visual elements meaningfully correspond and negatively affected when they are incongruent. Gruba (1997), studying L2 learners‘ comprehension of a Japanese TV news item found that more proficient viewers were less dependent on visuals for comprehension of the text–a finding which supports earlier work with other visual material (Mueller, 1980, Wolff, 1987) and favored the audio track if the visual element mismatched. Gruba notes that there was a sense that the listeners knew that the ―real story‖ was in the audio track and that images were misleading. Although more proficient listeners tended to rely less on the visual elements for comprehension, they nevertheless noticed more detail in the visuals than less proficient viewers, who were far more dependent on visuals for comprehension. Visual elements were more closely attended to when they were judged to be salient or provided novel information to the listener. Gruba found evidence to suggest that images and words worked together to confirm a listener‘s understanding of a particular element: audio clues could be confirmed by visuals and vice-versa; visual clues could be confirmed by the spoken track. The ramifications of the above discussion for the exploitation of TV news material in the second language classroom are therefore two folds in terms of criteria for selection and criteria for use. All news items are made up of varying degrees of symbolic, referential, schematic and iconic relationships between words and images. However, TV items which have more of an iconic or overlap relationship between words and pictures are likely to be better understood. In an overlap or iconic situation the viewer may be able to pick up cues from both image and wording. And the more iconic the relationship between words and pictures the more likely the TV news item is to provide an endogenous context. But again, as Wetzel (1994) has pointed out, it is the degree of fit between words and pictures which is crucial. In sum, the more iconic the relationship between words and images, the greater the likelihood that words and images will be self-supporting; the more symbolic the relationship between words and images (and this is more often the case with TV news), the greater the likelihood that the relationship will be dichotomous. Tuffs and Tudor (1990) comparing native speaker and non-native speaker interpretations of visual images used in British television, argue that non-native speaker comprehension is seriously disadvantaged by their lack of familiarity with both the denotation and connotation of these images in British culture. As such the isolation of pertinent visual images can be a powerful tool for the teaching of cultural aspects of the target language. Cooper (1996) suggests focusing students‘ attention primarily on the visual channel and using their speculations about the meanings of these images as a way of structuring the listening task. Cooper notes that such an approach brings to the surface not only the students‘ knowledge of how their countries‘ media work but how media works in the target language culture. Meinhof (1998) suggests that such ―metadiscursive‖ knowledge can have a wider learning effect by not only supporting language and cultural learning but also by helping learners critically assess TV itself, both in their own culture and in the target culture. Conclusion Those elements in TV news which make a particular news item suitable pedagogical material for the second language classroom can be considered now. 1165 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo First, universal exogenous and endogenous contexts are more accessible and understandable to language learners than specialized exogenous contexts, which may require more background knowledge and schema building. While endogenous contexts require little or no prior knowledge, these kinds of TV news stories tend to be less common. Universal exogenous contexts also require prior knowledge, but it is a kind of prior knowledge that language learners can be expected to already have, even though they may not have the vocabulary to express that knowledge. Questionnaires are a good way of monitoring whether students have the expected prior knowledge of universal topics such as studying, working, sleeping, etc. At the same time, an important point to remember is about expecting that the existence of a shared mental category presumes that the category will contain the same knowledge. For example, Japanese and Iranians perceptions of carry-on luggage may differ markedly. Such divergent interpretations of the same experience might be a source of cross-cultural enquiry that could shed light on both the target and the student‘s own culture. Second is the issue of criteria in linguistic difficulty. Intensive listening fulfills students‘ needs to work on bottom-up processing difficulties and balanced top-down approaches to listening comprehension. A selectional criterion based on words suggests that news items that use nonspecialized, componential lexical sets will be easier for second language learners to handle. Redundancy of input, both linguistic and visual, are important in selecting appropriate material, and increased redundancy of input is often found in news stories with a high degree of thematic unity. With regard to text type, many difficulties in processing TV news can be assigned to the nonnarrative structure of the news. News as infotainment and the use of dramatic framing tend to ―narrativize‖ TV news and make it more accessible for native and non-native speakers alike. A further element of text type is the mix of talking heads and voiceover visuals. Language learners may best benefit from a balance of delivery modes. And, with respect to the complex interplay of words and images, the iconic relationship of words and images is likely to have the greatest degree of fit between the visual and spoken channels, and this together with the higher likelihood that iconic word/image relationships will appear more in narrative texts, makes iconic audiovisual texts easier to process for second language learners. News items consist of combinations of iconic, schematic, referential and symbolic relationships between words and pictures. Symbolic relationships between words and images are more likely to be dichotomous, driving language learners either to seek understanding in the visual or the audio tracks depending on their proficiency. It should be noted here that this paper tried to help the teachers in the selection of appropriate TV news material for the second language classroom. However, Nothing can be said to be one hundred percent true based on these criteria, just the claim that where these criteria coalesce, the greater the possibility that these selections will prove to be accessible and stimulating and will provide meaningful material for both linguistic development and cultural understanding. 1166 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo References Baker, N. (1996). Using the TV news in the EFL classroom. Zielsprache, 26(2): 30-33. Bell, D. M. (2003). TV news in the EFL/ESL Classroom: Criteria for Selection. TESL-EJ, 7 (3). pp. 117. Available at: http://www-writing.berkeley.edu/TESL-EJ/ej27/a2.html. Accessed, February 2007. Bell, A. (1991). The Language of News Media. Language in Society, 16. Oxford: Blackwell. Brinton, D. & Gaskill, W. (1987). Using news broadcasts in the ESL/EFL classroom. TESOL Quarterly, 12(4), 403-413. [-15-] Berber, S. A. (1997). Proficiency and comprehension of television news in a foreign language. Revista de Documentacao de Estudos em Linguistica Teorica e Aplicada (D.E.L.T.A.), 13(2): 177-190. Brown, G. (1995). Dimensions of difficulty in listening comprehension. In D. J. Mendelsohn, & J.Rubin, (Eds.), A guide for the teaching of second language listening (pp. 59-73). San Diego: Dominie Press. Cauldwell, R.T. (1996). Direct encounters with fast speech on CD-Audio to teach listening. System, 24(4), 521-528. Carrell, P. (1983). Three components of background knowledge in reading comprehension. Language Learning, 33, 183-297. Carrell, P. (1984). Schema theory and ESL reading: Classroom implications and applications. The Modern language Journal, 68(4), 332-343. Carrell, P. (1987). Content and formal schemata in ESL reading. TESOL Quarterly, 21(3), 461-481. Carrell, P. & Wise, T. E. (1998). The relationship between prior knowledge and topic interest in second language reading. Studies in Second Language Acquisition, 20, 285-309. Chaudron, C. (1983). Simplification of input: Topic and reinstatements and their effects on L2 learners‘ recognition and recall. TESOL Quarterly, 17(3), 437-458. Chiang, C. S. & Dunkel, P. (1992). The effect of speech modification, prior knowledge and listening proficiency on EFL lecture learning. TESOL Quarterly, 26(2), 345-74. Cooper, R. (1996). Comprehending the Genre of the Television News Report. TESOL Matters 6(5), 10. Cooper, R., Lavery, M., & Rinvolucri, M. (1991). Video. Oxford: Oxford University Press. Couch, P., DiLeo, J. and Downey, M. (1999). Developing a media news course. Paper presented at the TESOL National Convention, New York. Freeman, D. (1998). Doing teacher-research: From inquiry to understanding. Boston: Heinle & Heinle. Gruba, P. (1997). Exploring digital video material. In R. Debski, J. Gassin, & M. Smith (Eds.), Language Learning Through Social Computing (pp. 109-140). Parkville Vic: Applied Linguistics Association of Australia. Joiner, E. G. (1990). Choosing and using videotext. Foreign Language Annals, 23, 53-64. 1167 �1st International Conference on Foreign Language Teaching and Applied Linguistics May 5-7 2011 Sarajevo Long, D. R. (1990). What you don‘t know can‘t help you: An exploratory study of background knowledge and second language listening comprehension. Studies in Second Language Acquisition, 12, 65-80. Mackenzie, A. S. (1997). Using CNN News Video in the EFL Classroom. The Internet TESL Journal, 3 (2). Available at: http://www.aitwech.ac.jp/~iteslj/,.Accessed February 2006. Meinhof, U. (1998). Language Learning in the Age of Satellite Television. Oxford: Oxford University Press. Mueller, G. (1980). Visual contextual cues and listening comprehension: An experiment. Modern Language Journal, 64(3), 335-340. Poon, A. (1992). Action research: A study on using TV news to improve listening proficiency. Research Report, 14: 1-70. Rubin, J. (1994). A Review of Second Language Listening Comprehension Research. Modern Language Journal, 78(2), 199-221. Rubin, J. (1995). The contribution of video to the development of competence in listening. In D. J. Mendelsohn & J. Rubin (Eds.), A guide for the teaching of second language listening (pp. 151-165). San Diego: Dominie Press. Rumelhart, D. E. (1980). Schemata: The building blocks of cognition. In R.J. Spiro, B. Bruce, & W. Brewer (Eds.), Theoretical Issues in Listening Comprehension (pp. 99-135). Hillsdale, N.J. : Lawrence Erlbaum Associates. Shohamy E. & Inbar, O. (1991). Validation of listening comprehension tests: The effect of text and question type. Language Testing, 8, 23-40. Stempleski, S & Arcario, P. (Eds.). (1992); Video in second language teaching: Using, selecting, and producing video for the classroom. Alexandria, VA: TESOL Tchaicha, J. D. (1996). Background Knowledge and Second Language Proficiency: How Adult ESL Learners Make Sense of US News Programming. Unpublished doctoral dissertation: Harvard University. Tuffs, R. & Tudor, I. (1990). What the eye doesn‘t see: cross cultural problems in the comprehension of video material. RELC Journal, 21, 29-44. Weaver, C. (1994). Reading Process and Practice. Portsmouth, NH: Heineman. Wetzel, C. D., Radtke, P. H. & Stern, H. W. (1994). Instructional effectiveness of video media. Hillsdale, NJ: Lawrence Erlbaum Associates. Wodak, R. (1987). ―And where is Lebanon?‖ A socio-psycholinguistic investigation comprehension and intelligibility of news. Text, 7(4), 377-410. Wolff, D. (1987). Some assumptions about second language text comprehension. Studies in Second Language Acquisition, 9, 307-26. 1168 � Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 595 Title A name given to the resource Mass Media (TV and Radio) News and Language Learning Author Author Bahrani, Taher Sim, Tam Shu Abstract A summary of the resource. Two important issues regarding the selection and preparation of TV news for language learning are: the content of the news and the linguistic difficulty. Content is described as being specialized or universal. Universal contexts are likely to be more comprehensible than specialized contexts. As for the linguistic difficulty, it consists of acoustic, lexical/syntactic and text-type difficulties. With regard to texttype, four types of spoken and visual elements are identified: symbolic, referential, schematic, and iconic. Audiovisual texts with greater iconic combinations are likely to be more comprehensible for language learning. Date A point or period of time associated with an event in the lifecycle of the resource 2011-05 Keywords Keywords. Conference or Workshop Item PeerReviewed P Philology. Linguistics Dublin Core The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/. Extent The size or duration of the resource. 884 Title A name given to the resource Mastering Morphological Competence in the Acquisition of Croatian as L2 Author Author Aladrovic Slovacek, Katarina Abstract A summary of the resource. During the project “Development of Communicative Competence in the Early Croatian Language Discourse” (2006-2011), a research on the mastering of Croatian as a second language was carried out among the children of Croatian emigrants to Germany. Although all participants were born in Germany and German is their dominant idiom, most of them (76.5%) consider Croatian to be their mother tongue. However, the study has shown that all participants use German as the first language of communication and their Croatian language competences are lower. This means that, despite their personal attitudes towards Croatian as their mother tongue, Croatian is in fact the second language (L2) of these speakers. The research has been carried out on the sample (N = 100) of participants belonging to different age groups and different groups according to the number of years they had studied Croatian. As Croatian morphology is one of the most difficult grammatical contents, the primary aim of the research was to investigate the mastery of the morphological competence as that segment signals the general level of the mastery of the standard Croatian language. The instrument used in this study was the Test of Communicative competence in the Croatian language. For the purpose of this paper the part dealing with the mastering of the morphological competence of the standard Croatian language was analysed. The data were analysed with the SPSS statistical analysis software. The methods used were Pearson’s and point bi-serial correlation coefficients to show correlation between the dependent variable (mastery of the morphological competence) and the independent variables (participants’ age and years they had spent learning Croatian). Research results will be used for the purpose of the analysis of language competences in pupils whose second language (L2) is Croatian and the estimation of the successfulness of Croatian language teaching abroad. Date A point or period of time associated with an event in the lifecycle of the resource 2012-05 Keywords Keywords. Conference or Workshop Item PeerReviewed P Philology. Linguistics