Mohammad Elahee*: Any attack on a bank, whether it be Bank Asya or some other bank, on political grounds could lead to catastrophic consequences. The modern banking sector is based on trust. Any unwarranted government intervention into the banking sector destroys that trust, and the market loses confidence in the banking system. And when the banking system suffers, the entire economy suffers. The Great Depression in the US was caused not by the stock market crash of 1929, but by the subsequent bank failures resulting from imprudent decisions and lack of action by the US government then. The US government learned its lesson, and in 2007, when the major American banks were on the verge of collapse, it did everything in its power to prop up the failing banks, even though some banks were clearly in breach of several laws. From a recent Wall Street Journal report, it seems to me that Bank Asya has a higher capital adequacy ratio than is required by the Turkish Central Bank, and is also higher than the ratios maintained by most other Turkish banks. It will be most unfortunate if the Turkish government tries to close down Bank Asya because of its alleged link with the Gülen movement. Political scores should not be settled at the expense of the economy. Any wrong move by the Turkish government would send a negative message to foreign banks and investors, which consequently can cause untold damages to the Turkish economy.
*A professor of international business at the School of Business and Engineering at Quinnipiac University in Connecticut. Elahee has been recognized for his efforts with the university's most prestigious academic honor, the Excellence in Teaching Award.
Excerpted from the interview with Prof. Mohammad Elahee, published on Sunday's Zaman, 28 September 2014, Sunday
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