Turkish banks’ dependence on external funding was back in focus in January after one of the country’s leading bankers was found guilty of involvement in a multi-billion dollar scheme to evade sanctions on Iran.
Mehmet Hakan Atilla, the former deputy chief executive of state-controlled lender Halkbank, was arrested last March at JFK airport in New York at the end of a bond roadshow. He was convicted on January 3 of conspiracy to violate US sanctions law and commit money laundering by a federal court in New York after a three-week trial.
The verdict prompted furious denunciations from Turkish politicians, with president Recep Tayyip Erdogan condemning it as “scandalous” and “a political coup attempt”.
US authorities were slower to react, but analysts say penalties against Halkbank – and potentially other entities implicated in the case – are likely.
“It’s hard to see the US Treasury leaving this with no action against specific institutions,” says Tim Ash, an emerging market strategist at BlueBay Asset Management. “It’s important for them that warnings are sent to others and that where institutional vulnerabilities are revealed, the fault is accepted and systems changed.”
