Turkey to tackle bad loan problem
According to Bloomberg, the Turkish government is determinded to assist banks to tackle their bad loan problem which was caused by the lira’s plunge and soaring interest rates. The regime considers capital injections and even the establishment of a bad bank. The measures could be announced this Thursday, according to sources in Turkey.
“The creation of a so-called bad bank to absorb all of the debts, which are bound to start non-performing, may dilute some of the risks associated with the Turkish banking sector,” commented Julian Rimmer, a trader at Investec Bank Plc in London. “But the subsequent lack of transparency will concern bond investors and there is no way of avoiding a general decline in Turkey’s overall creditworthiness, no matter where you park the NPLs.” Bloomberg
Disclaimer
The information provided on this website is for general informational purposes only and does not constitute legal, tax, financial, or professional advice. While we strive to ensure accuracy and completeness, no guarantee is given regarding the timeliness, correctness, or completeness of the content. The content does not replace individual advice from qualified legal, tax, or financial professionals. Any actions taken based on the information provided are done at the user’s own risk. Liability for any direct or indirect damages arising from the use or non-use of the information presented is excluded to the fullest extent permitted by law.
(Image rights: istockphoto.com/theendup)
Comments are closed here.