Over the last few decades, interest on the role of finance for investment and macroeconomic fluctuations under systemic uncertainty and crisis has grown rapidly. This book provides one of the first systematic analyses of financial intermediation and origins of crises in transitional economies undergoing reform and liberalization and takes Turkey as an example due to its turbulent economic past fraught with intermittent financial crises. The book develops two theoretical models of financial intermediation under uncertainty to shed light on its role in generating credit crunches and business cycles. It also analyzes empirically the impact of credit crunch and financial crisis on private investment and bank profitability, the role of fiscal mismanagement in generating crisis prone fundamentals in the financial sector, and the strengthening ties of bank-holding affiliations as a bulwark against crisis induced uncertainty. The book is of value for specialists and practioneers, who are interested in the issues of banking sectors undergoing reform, the effect of uncertainty on the credit markets and the financial origins of macroeconomic crises, and banking failures.