| Headline: Turkey’s banks, and its economy, stand on the brink Source: Euromoney Date: September 2001 Author: Metin Munir The February currency crisis has left Turkish banks bereft of capital. Disciplines imposed after the December 1999 IMF stand-by agreement mean that they are unable to replenish their reserves in the time-honoured way – by lending to the government. Underlying the sector’s particular problems – the only answer to which seems to lie in consolidation and foreign investment – is a generalized economic quagmire in which flounders a discredited political elite. There is little optimism to be found among those in the know in Turkey and the most pessimistic predict that a third crisis is just around the corner.
The December 1999 stand-by agreement with the IMF has put an end to wild west banking where everyone made pots of money by lending to the state treasury at surrealistic interest rates, many private banks were robbed by their shareholders and state banks served as the politicians’ private purse. | |||||||||||||||||||||||||||||||||||||||||