INTRODUCTION

Following the Great Depression of 1929, banking and other financial services were separated from each other. However, the number of countries separating them is not that high. Investment banks have assumed key positions in the progress and growth of American economy.

DOI: 10.4018∕978-1-4666-6268-1.ch008

ing. Things changed after 1933, and banks were restrained from savings banking. Institutional and operational characteristics of investment banks vary across countries. While investment banks in industrialized countries target real sector and economic growth, those in developing countries need external sources due to insufficient capital. Therefore these banks primarily deal with eco­nomic development (Mishkin, 1992: 78-88; Mish­kin, 2004: 330-337; Grinblatt and Titman, 2002: 4-22; Hubbard, 2002: 52-66; Peter and Marguis;

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2005: 45-72; Trescott, 1965: 88-102; Dornbusch and Fischer,1988: 12-26; Hubbard, 2002: 52-66; Ashcraft, A. B., & Schuermann, T., 2008; Smith & Watts, 1992; 263-292).

Turkey has been receiving investment cred­its since its membership to the World Bank on March 11, 1947. Turkey’s share of capital in the World Bank is 832.8 million dollars. This number is equal to %0.53 of the total capital. As for the types of investment credits, they are “re­organization of Ministry of Health,” “renewable energy project,” “electricity distribution and reha­bilitation project,” “energy community of South East Europe,” “Istanbul Seismic Risk Mitigation and Emergency Preparedness Project,” series of “export finance intermediary loan,” “small and medium enterprises loan,” “restoring equitable growth and employment programmatic develop­ment policy loan.”

Besides those stated above, Country Partner­ship Strategy for 2008-2011 enacted in February 2008 aimed “to help Turkey complete its harmo­nization process for EU membership, and bring steady growth, fair distribution of income, glob­ally competitive power, and knowledge society. Thus, Turkey has received $4,969 billion credit from the World Bank to finance above mentioned projects; almost $5 billion.

This paper primarily deals with the objectives and duties of certain investment banks worldwide and their relation with Turkey. In this vein, pre- Bretton Woods international monetary system is explained and monetary movements of the period are analyzed. Besides, The World Bank, which opens credits to worldwide investments are scrutinized. How the World B ank operates, credits (investment, adjustment, hybrid, and common loans) it has opened have been studied. Affiliates of the World Bank are also analyzed.

But this paper primarily deals with the banks opening investment credits to Turkey and their relation with the country. The paper evaluates the relationship between the World Bank and Turkey, Turkey’s capital share in the World Bank, and the received investment credits. The paper also investigates Regional Development and Invest­ment Banks such as European Investment Bank, Bank Asya, Islamic Development Bank, African Development Bank and their expectations.