One can not forget that 2012 commercial code and other incentives regulations introduced by Capital Market Board was altered by the opposition party that resulted in less transparency and governance standards. Corporations use their own money like an ATM machine.Mavi Boncuk |
Turkish banks' foreign borrowings increased almost threefold, to $164 billion, between the end of 2008 and the end of the first half this year, rising to 38 percent from 20 percent of the country's total external debt. Sovereign external debt rose more moderately and other sectors' foreign borrowings were largely unchanged.
Banks therefore accounted for 71% of the increase in Turkey's foreign debt during the period. Furthermore, banks accounted for virtually all the increase in foreign-currency external debt, as the growth of sovereign external liabilities mainly arose from greater foreign holdings of lira-denominated government bonds. The short-term component of banks' external foreign-currency liabilities also increased significantly, more than quadrupling over the same period, while long-term foreign-currency debt doubled.In a separate report on Turkey on Wednesday, Fitch said.
Turkish privately owned businesses' ratings are constrained by poor corporate governance, including the absence of an independent board, weak transparency and limited disclosure practices. “Although corporate governance practices are steadily improving in Turkey, through the implementation of 2012 commercial code and other incentives regulations introduced by Capital Market Board, a move in company culture toward more independency, transparency and disclosure could still take some time, specifically for privately owned corporations that are still to adopt these practices,” the agency warned.
Lagging governance standards can discourage international investors from looking for opportunities in Turkey as they face closely controlled company ownership and general lack of transparency, Fitch stressed.