A European Commission report on Turkey that was held back until after the Nov. 1 election has criticized the recent intervention by the country's banking watchdog in leading Islamic lender Bank Asya, stressing the incident has raised concerns over political meddling in the Turkish finance sector.
The management of Bank Asya was handed over to the Savings Deposit Insurance Fund (TMSF) in late May. A copy of the draft annual progress report on Turkey's EU candidacy that was acquired by Today's Zaman mentions the Bank Asya seizure, noting there are questions hanging over the TMSF decision and how proportional it was based on the circumstances at that time.
Underlining the lingering “perception of political meddling in the Turkish banking sector,” the EU report says decisions such as the Bank Asya seizure have cast doubts over the independence of public auditing and regulating mechanisms in Turkey.
A recent Reuters article regarding the EU report said it also hinted at criticism of Recep Tayyip Erdoğan's personal exercise of power, saying the president remained engaged in a wide range of foreign and domestic policy issues, leading to criticism in Turkey that he was overstepping his constitutional prerogatives.
Bank Asya has been administered by the TMSF since May and is still prohibited from carrying out official transactions on behalf of public institutions.
Prior to a takeover of its management, defamatory remarks made about the bank by high-ranking state officials led to mass withdrawals by pro-government companies, which many saw as an attempt to lead the bank into financial difficulty. Ensuing cancelations of state contracts were a sign of the further application of pressure by the government on the private bank.
As its founders are sympathizers of the faith-based Hizmet or Gülen movement -- a group that has become the latest foe of the Justice and Development Party (AK Party) government -- the Banking Regulation and Supervision Agency (BDDK) transferred control of the lender to the TMSF after three months of interim management. In explanation, the BDDK cited insufficient transparency in the bank's ownership structure, though most representatives of the sector have found this reasoning baseless.
Published on Today's Zaman, 3 November 2015, Tuesday