Turkey: banks more vulnerable than in currency crisis

Turkey’s banks muddled through the currency crisis two years ago, but they are now in a weaker position to confront the economic and financial market fallout from the coronavirus outbreak. At the very least, the recent sharp tightening of external financing conditions means that banks’ balance sheets are likely to shrink and a credit crunch will ensure. In a worst-case scenario, there could be a wave of bank defaults.
Jason Tuvey Senior Emerging Markets Economist
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