February 2002
Banks face up to survival tests
The Turkish banking system is well on the way into restructuring and consolidation that optimists argue will make for a lucrative investment story. State banks are rationalizing – and taking a smaller share of the market – and the way in which private banks will be recapitalized by the treasury will mean that the weakest – half of them – won’t survive unless they merge.
The 1990s will be remembered as the decade when Turkish politicians
and their protégés pillaged the banking sector with a gusto that
drove the country to the brink of bankruptcy.
The full amount siphoned out of state and private banks will
probably never be known. Credit rating agency Fitch estimates that
public-sector debt from bank restructuring stood at $49.6 billion
in June last year - 39% of GDP. This is on a similar scale to Korea
and Chile. However, Turkey's deficit resulted more from political
meddling with state banks, which dominated, than to poor lending
strategies such as those that prompted bank crises in Asia and
Latin America.
How to deal with the situation is rapidly leaving the realm of
economics: in a country where some politicians break the law
themselves and offer lawbreakers protection, how do courts deal
with wrongdoers?
A judicial impasse has arisen over what to...
This is archived content. Your current settings does not currently allow access to the archive. To gain access visit the subscription page or call our hotline on +44 (0)207 779 8999.
If you are a trialist or subscriber, please enter your username and password at the top right-hand side of euromoney.com
Subscribers to Euromoney benefit from:
Level 1:
- Online access to the past 12 months content
- Tailored RSS news feeds direct to your desktop
- News delivered directly to your mobile device or PC
- Personalised email newsfeed of 'Top stories' and 'Breaking news'
Level 2:
- Exclusive access to euromoney.com - Read the latest issue early online, search for specific developments by region or sector, interrogate the results of Euromoney's benchmark polls, and view the archive dating back to 2000
- 12 monthly issues of Euromoney magazine
- More than 30 specialist research guides free
- The results of Euromoney’s polls and surveys
- Tailored RSS news feeds direct to your desktop
- News delivered directly to your mobile device or PC
- Personalised email newsfeed of 'Top stories' and 'Breaking news'
Click here to subscribe