The transfer of operations would be part of a broader project to boost the profile of Istanbul, already the country’s commercial capital, as an international financial center. (source)
- Bloomberg News
- Traffic passes the headquarters of Turkey’s central bank in Ankara.
But the aspirational commitment to moving the bank hasn’t been twinned with clear formal announcements. In fact, Ankara appears in recent months to have cooled its rhetoric on the issue, with central bank Governor Erdem Basci in December stressing that a move was “not on the agenda.”
Turkey’s Ministry of Environment and Urbanization on Wednesday published a plan for Istanbul’s new financial center, to be located on the city’s Asian side, which it said would be “bigger than Wall Street, London or Dubai.” That statement said state banks and regulators based in Ankara would move but mentioned nothing about the central bank.
But a supplementary document sent to The Wall Street Journal in response to calls for clarity appeared to confirm that the plans for the move have been formalized, while potential legal measures that could block relocation have been removed.
According to a translation of the Ministry of Environment’s memo: “Necessary amendments on the laws concerning the Central Bank… and the headquarters of other financial institutions were made, and the work required for their move to Istanbul was done.”
The wording appears unambiguous, but attempts to clarify the memo were met with silence.
The environment and planning ministry seemed unaware of the potential significance of the statement. The economics ministry said questions over the move should be taken up with the office of Deputy Prime Minister Ali Babacan–the government’s most senior economic policy maker. Babacan’s office didn’t respond to repeated calls for comment. The central bank said it was “surprised” by the memo, but didn’t comment further.
Moving the bank would be politically sensitive–fueling accusations that the Islamically-inspired government is further emasculating the country’s secular citadel. Opposition parties see relocating the central bank as a first step in a bid by the government to move the entire capital to Istanbul.
Modern Turkey’s founder, Mustafa Kemal Ataturk, moved the capital to Ankara from Istanbul in order to make a clean break with the Ottoman Caliphate.
Economists say the reality may be a bit more muddy; that the government isn’t yet sure that moving the bank is worth the political risk, but has removed legal barriers in case it decides to proceed.
“Bottom line is that I don’t think the government has decided where the central bank will be. They’ve done a lot of research into which economies have the bank in the capital or the commercial hub but it’s unclear how much it would benefit the economy to move it… The central bank deals with the treasury much more than with financial institutions, so they’d prefer to be in Ankara,” said Mert Yildiz, an economist at Renaissance Capital.
Source: http://blogs.wsj.com/emergingeurope/2012/02/10/is-turkeys-central-bank-moving-document-suggests-it-could-be/ - Feb 10, 2012
