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    Critical demands made by Turkish banks cushion against global crisis

    HotNewsTurkey Staff
    14.10.2008 - 10:45 | Son Güncelleme:

    The Turkish financial sector drew its road map against the global turmoil and demanded three critical arrangements from the country's official bodies, Referans business daily reported Tuesday.

    The report said the Banks Association of Turkey (BAT) held an emergency meeting on Oct. 8 to discuss the crisis in the global finance sector and list its recommendations to minimize its effect on Turkey. BAT, founded in 1958, is based in Istanbul and headed by the CEO of Is Bankasi, Ersin Ozince.

     

    BAT decided to demand a 50 percent reduction on the reserve requirements to create liquidity amid global turmoil.

     

    Under the existing arrangement the reserve requirements of the banks are 6 percent for local currency deposits and 11 percent for foreign exchange deposits.

     

    BAT also decided to ask for the re-launch of the foreign exchange depot market for banks to borrow from each other through the central bank.

     

    The central bank re-launched the mechanism a day after the BAT meeting, forcing bankers to withdraw this from their official demand list.

     

    The banking officials, however, decided to demand an increase in the minimum volume of transaction, which stands at 1 million dollars or euros.

     

    The central bank is working on the proposal to increase the daily limits of the mechanism, Referans added.

     

    EXPAT FUNDS

    The banking officials also decided to pile pressure on the government to make arrangement that would attract funds held by Turkish citizens in foreign banks, the report said.

     

    There is no official data on the amount of the funds in question however it is estimated that there are $100-150 billion of funds held in some 22,000 Turkish citizens' accounts abroad.

     

    "Attracting some of these funds at such a critical time is crucial for us to overcome in the coming period," a bank executive was quoted as saying by Referans.

     

    Turkish government officials had said they are working on a plan to attract such funds.

     

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