The ruling AK Party crafted a bill that foresees heavy sanctions on banks if they take actions that the economy administration dislike which also makes it impossible to criticize the economy.
The AKP-MHP alliance, which forms the government behind the scenes in Turkey, concocted a bill regulating the banking sector.
For a while, people who have been criticizing the Turkish economy have been denounced by President Tayyip Erdoğan, with the label “traitor.” The amendment also allows authorities to criminalize the criticism.
The bill, along with identifying the new crimes with regards to the economy, also aggravates the penalties for the existing crimes. The bill foresees fines for banks that perform “manipulative and misleading transactions.” Bankers who carry out transactions that “endanger the banking system” are also subject to hefty penalties.
The bill does not define what transactions are “manipulative”, what “misleading” is and what the “transactions endangering the banking system” are. The interpretation is entirely left to economic management.
Erdal Sağlam, an economist, quoted a banker as asking, “For example, if an account owner says ‘Turkish Lira will lose its value as the economy is not well-managed,’ will it be considered as ‘transactions that endanger the banking system’ even if the US Dollar does not gain value in the following months?”
Bankers are, therefore, perplexed. Due to the pressure on the economy, many international companies and large banks such as UniCredit have left the Turkish Finance system.
HDP added dissenting opinion
Peoples’ Democratic Party (HDP) is against the change.
According to the HDP, with the new law, private banks will be forced to give full support to the government’s economic policies: “For example, with this proposed law, the ruling AKP will be able to increase the pressure on private banks that are not willing to provide the credits as much as the economy authorities wish so. Political pressures can be imposed on banks.”
Banks will be compelled to give loans
“The government wants credit to be given everyone, nevertheless banks are not willing to provide loans that are surely going to be dead loans,” a banker stated and highlighted that private banks increased consumer loans, but this did not satisfy the government. Banks will be compelled to give these loans, thanks to the new amendment. Besides, the economic administration will decide, not the bank itself, to what extent the banks will receive commissions on commercial loans.
Especially considering that the giant building contractors close to the government have not been able to find loans in the recent period, banks will have to give these loans with the new law through commissions envisaged by the economy administration.
Government is unable to keep USD in check
On the other hand, the Turkish Central Bank has been using the methods criticized by economists since the New Year in order to curb the appreciation of the dollar against the Turkish lira. $17 billion was sold to the market through private banks. This includes $1 billion in exchange for sending the troops to Libya. Resorption in The Central Bank’s foreign exchange reserves is quite a risky situation for Turkey since the country is indebted in foreign currency. However, the Erdogan administration is determined to keep the dollar at 6 TL so that the construction industry does not collapse.
