Page 15 - TURKRptJul20

Meanwhile, the cost of regulation is rising in Turkey. Ankara has introduced a series of rules to take firmer control of FX markets and banks.
“​You can’t have changes in the regulatory framework every week. This has become too common and has to settle down​,” a senior bank executive was quoted as saying.
The banking industry in Turkey has had decades of ‘commando training’ in dealing with incompetent politicians, incoherent and incontinent economic policy making, hyperinflation, neverending crises, economic shocks and so forth. But the current administration—the new-style, ultra-assertive executive presidency led by Recep Tayyip Erdogan—is stubbornly determined to tame private sector bankers into entirely toeing the line.
The orders sent out actually boil down to something rather simple: the lenders are to hand over their FX to the central bank in swaps or to the Treasury in return for government paper, while extending loans to the Turks. And, as their FX liquidity is coming to an end, their shareholders must inject more capital into them for the use of the government.
The BDDK has, meanwhile, imposed administrative fines amounting to Turkish lira (TRY) 102mn ($15mn) on 18 banks on the basis of complaints submitted by individual and commercial clients during the onset and fight against the coronavirus (COVID-19) outbreak. It also stated that examination processes as regards the complaints would continue without interruption.
Earlier in May, the regulator levied TRY19.7mn ($2.9mn) of fines on 15 banks.
These may be small sums for Turkish lenders but the message that the fines convey is more important than the actual penalty.
Meanwhile, the state-run trio—Ziraat, Vakifbank and Halkbank—on June 1 unveiled an awaited new loans package, Bloomberg reported. They are offering 15-year mortgages pegged to monthly interest rates as low as 0.64%, or under 8% annually. Annual inflation is running at around 11%.
Similar rates and grace periods of as much as a year are on offer on loans for the purchase of made-in-Turkey cars and home appliances.
The set of loan offers also includes holiday packages and some other products.
The asset ratio amendment arose after some unnamed bank executives complained to Reuters that “years of government pressure to defer dividends and drive Turkey’s stop-start growth have tested the patience of shareholders”.
Well, the bank shareholders may as well reach for pills or psychiatrists when it comes to stress caused by this government because it is not for listening. The regulation with the initial asset ratio was issued after private lenders complained to the TBB banking association—chaired by Ziraat’s general manager, whose bank we may recall is controlled by you-know-who—that they were being publicly treated by the government loyalist media, officials and Erdoganists as whipping boys.
“Changes to rules and regulations were increasingly introduced using more discretionary instruments. Between 2003 and 2008, most changes were instituted through primary Laws, but after 2009, most changes came through communiques and regulations; the latter accounted for around 90 percent of changes relating to business rules and regulations between 2016 and 2018,” the World Bank said in its latest Turkey Economic Monitor released in October. Turkey’s score in the international financial institution’s Doing Business ranking has risen to 76.8 in the 2020 survey (33rd place) from 69.2 in 2016 (55th
15​ TURKEY Country Report​ July 2020 ​ ​www.intellinews.com