Turkey's central bank chief to meet German banks over crisis

Published December 12th, 2000 - 02:00 GMT

Governor of Turkey's central bank, Gazi Ercel, met the leaders of several major German banks Monday, December 11, to discuss the banking and financial crisis gripping his country, a banking official told AFP. 

 

"A meeting is actually scheduled for today with several German banks," said a spokesman for Deutsche Bank, which organized the meeting, confirming reports in the German press. 

 

"I think it is going to be an exchange of views," he added, playing down the possibility of an announcement on concrete decisions. 

 

Monday's edition of the financial daily Handelsblatt said Ercel would be asking for an extension of short-term credit lines to help deal with the liquidity crisis provoked by the weakness of Turkey's banking sector. 

 

Deutsche Bank, Dresdner Bank and regional bank WestLB are among those due to attend the meeting. 

Stanley Fisher, deputy managing director of the International Monetary Fund, will also be there to set out the details of the conditions attached to the $10 billion in emergency aid it has granted Turkey, the paper added. 

 

When the deal was announced last Wednesday, Turkey agreed to speed up reforms in the banking sector and its privatization program, and to step up the battle against inflation. 

 

Ercel is due to meet officials from the US banks in New York on Wednesday, the paper added. 

Deutsche Bank sources told the paper that its presence at the meeting did not mean that it was particularly exposed in Turkey. The bank's shares recently fell over fears that it might have been caught in the fallout to the Turkish crisis. 

 

The liquidity crisis had erupted because the authorities had used a high exchange rate and tight monetary policy to slash inflation, but while the main banks were strong, weak secondary banks relying on high-yielding bonds for income, had been squeezed as inflation fell.— (AFP)  

 

© Agence France Presse 2000  

 

 

© 2000 Mena Report (www.menareport.com)

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