June 2, 2015

European Commission says Bank Asya takeover raises questions

The European Commission has said the context in which the recent seizure of Turkey's Bank Asya took place raises a number of questions, stressing that such a step can only be taken under clearly and strictly defined conditions.

Answering a question by Today's Zaman on the Bank Asya takeover, European Commission spokeswoman Maja Kocijancic said the commission is assessing recent developments that resulted in the seizure of the bank carefully.

“While under the European Union acquis there may be situations in which the takeover of a bank by the state may become justified, such a step can only be taken under clearly and strictly defined conditions which aim at carefully balancing all justified interests of concerned parties. Proportionality and reasoning for such a takeover is key in such cases,” Kocijancic said.

Stating that it is important for Turkey not to damage the confidence of the financial sector and reassure investors that their investment will be protected in the country and that all decisions taken are based solely on clearly defined conditions without any other factors such as political interference playing a role, Kocijancic said any other scenario would call into question the independence of the national regulator and be a cause for concern.

Turkey's Banking Regulation and Supervision Agency (BDDK) announced late on Friday that it had handed over control of the bank to the state-run Savings Deposit Insurance Fund (TMSF) after a months-long political campaign targeting the bank.

Bank Asya, founded by sympathizers of Turkish Islamic scholar Fethullah Gülen, has been targeted by Turkish President Recep Tayyip Erdoğan since a corruption scandal implicating people in his inner circle erupted in December 2013. Erdoğan blames the Gülen movement, also known as Hizmet (service) movement, inspired by Gülen, for the corruption scandal, which he brands a “coup attempt.”

As Erdoğan's war on the Gülen movement intensified, Bank Asya depositors, including state-owned firms and institutions, last year withdrew TL 4 billion ($1.7 billion), or some 20 percent of the bank's deposits, reportedly under pressure from Erdoğan.

Pro-government newspapers carried almost daily reports on Bank Asya's supposed woes earlier last year, portraying it as a failing bank being propped up by members of the Gülen movement. The government also canceled tax collection and social security payment contracts with the bank in August, while Erdoğan has on several occasions publicly targeted the institution, claiming it has bad financials and even once declaring that the bank has already sunk.

Published on Today's Zaman, 01 June 2015, Monday