Surety Bonds and Application in Turkish Financial System and Potential Effects

Mehmet Yeşilyaprak and Ali Polat
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Mehmet Yeşilyaprak: Türk Eximbank
Ali Polat: Yıldırım Beyazıt University

Journal of Finance Letters (Maliye ve Finans Yazıları), 2018, vol. 33, issue 110, 135-160

Abstract: Surety insurance is one of the contracts by which a guarantee is provided to cover the contractual, legal or regulatory obligations of the principal. In addition to its usage in numerous fields, it is also used in project financing in a similar way to guarantee letters. Legal base for surety bond has been made suitable and the types of bonds have been defined in Turkey. Such developments will have possible effects for Turkish financial system. The assessment of this new instrument which is going to affect banks and other stake holders is a part of this paper. The main objective of this study is to reveal and discuss positive and negative aspects of surety bonds for Turkish financial system as a new product and to compare surety bonds with other rival, supplementary or alternative products.

Keywords: Surety Bond; Surety; Insurance; Eximbank; Guarantee (search for similar items in EconPapers)
JEL-codes: G20 G21 G22 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:acc:malfin:v:33:y:2018:i:110:p:135-160

DOI: 10.33203/mfy.384741

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