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Economy

Turkish government wants lenders to fix their $36 billion-debt problem

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The comments come as the government is working on legislation to facilitate restructuring negotiations between lenders and borrowers.

Wednesday 31, July 2019

Turkey is leaving banks to sort out the restructuring of debt by themselves, reported Bloomberg.

The Treasury and Finance Minister said that with half of TRL 400 billion ($72 billion) of troubled loans in the country already reorganised, the government will not cover any losses incurred from bad loans, adding that the economy will be better off once the balance has been dealt with.

Berat Albayrak, the Turkish Treasury and Finance Minister, said, “The level of success depends on them, some say ‘government should cover losses that will not happen, the banking sector should not take the easy way.”

President Recep Tayyip Erdogan’s administration is seeking to stoke lending even as non-performing loans increase and profit across the industry declines.

The construction industry, which suffers from a large number of unsold homes as consumption stalls is not posing a systemic risk to banks and the government has no plans to rescue businesses in the real estate industries, but is closely monitoring them, Albayrak said.

TAGS : President Recep Tayyip Erdogan, Berat Albayrak, debt restructuring, bad loans

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