| The main objective of this thesis is to examine the causes of the bankruptcy of Esbank, Turkey. This case study shows the links between bankruptcy and corruption. The study demonstrates that bankruptcy for profit, namely looting and outright fraud in the form of lending resources of the bank to a group of companies owned by the bank, by legal and the illegal means, was an important cause of the Turkish banking crisis during the 1990s. The looting process primarily involved lending the bank's resources to firms that were directly controlled by the parent company that was also largest shareholder of the bank. The failure to establish an effective system of prudential regulation and supervision, the politicized regulatory environment that regulates entry into and exit from the banking system, and the failure to penalize outright fraud and illegal behavior all paved the way to bankruptcy for profit strategies and looting. |
