Turkish banks have become the debt-raising branch
of the government. Estimates suggest that between 40% and 50%
of the total assets of the banking system are treasury bonds
denominated in Turkish lira or Eurobonds. This ratio is in
reality larger than it appears because the bulk of banks'
assets are not cash but real estate and shares in non-bank
affiliates. Loans to businesses constitute no more than 15% to
20% of assets, according to Global, an Istanbul-based
securities company.
Akbank, Turkey's most profitable bank, is a good example. Its
total assets in 2002 were TL25 trillion ($15 billion). Of this, 49%
was invested in government paper. Loans were...
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