www.todayszaman.com - The hope that İstanbul will become an international financial center (IFC) in the near future has been disappearing as progress on the project has been slow in many respects.
The long-overdue project has been talked about for years by many politicians and has remained music to the ears of society. In 2007, the ruling Justice and Development Party (AK Party) government set about developing İstanbul into an IFC as one of its major long-term economic goals. Steps taken by the current ruling party has many ordinary citizens believing it would be accomplished; however, some experts argue that the achievement of such a goal in the near future is a dream due to a lack of necessary policies and regulations. (source)
For example, it was announced earlier that the IFC-İstanbul, the physical heart of the project which will be built in the Ataşehir neighborhood, aims to transform the city into a global center of finance. The project proposal has also convinced Ankara-based public banks such as Ziraat, Vakıf and Halkbank, and other public financial institutions like the Banking Regulation and Supervision Agency (BDDK), the Capital Markets Board (SPK) and the Turkish Banks Association (TBB) as well as the İstanbul Stock Exchange (İMKB) to move their headquarters from their current locations to İstanbul’s Asian side. However, even though the İstanbul municipality has been making great effort to realize the project, the State Planning Organization (DPT), which is in charge of the project, has not given many details about it, making people suspicious the project has been delayed.
Speaking to Sunday’s Zaman, a top official from an institution who wants to remain anonymous said that since the DPT has not given out many details on the project, it may appear that no progress is being made, and the government itself may not even be aware of the depth of the project. The official stated, “It looks like only the İstanbul municipality is working on the project by constructing a new metro line to the area to transport the large number of passengers expected every day, as well as new housing projects and shopping centers that are being built particularly in Ataşehir to prepare for the expected real estate demand.” He also expressed that he is hopeful about new İMKB President İbrahim Turhan and the expectation that the İMKB will gain more depth by attracting large-scale and international businesses with new policies implemented by the president. Noting the absence of a great deal of cash flow in the İMKB, he stressed that İstanbul will face tough competition especially from Moscow, which has large amounts of cash invested, in addition to European stock exchange centers that operate with about $15 trillion, compared to the İMKB, which operates with $700 billion at most. However, he concluded by saying İstanbul has great potential to become an IFC in the future, but it will require a great deal effort and take a longer time.
However, Dow Jones Indexes’ Senior Director of International Markets and Products Deborah Ciervo said in December that the İMKB is “more sophisticated” than its regional competitors in the Middle East, North Africa and Eastern Europe, and Moscow is not as accessible to foreign investors as the İMKB due to a less open and less favorable legal and regulatory framework.
The most important characteristics of an IFC are that it provides integrated financial services in all major financial market segments, including foreign exchange, money, capital (equities and bonds), banking and insurance, and is located in a developed country. It is been cited by experts that the seven pillars of the foreign direct investment (FDI) are: institutional environment, covering financial sector liberalization, corporate governance, legal and regulatory issues, and contract enforcement; business environment reflecting human and physical capital, taxes and costs of doing business; financial stability, encompassing the risks of currency, systemic banking and sovereign debt crises; banking financial services, measuring size, efficiency and financial disclosure; non-banking financial services, capturing initial public offerings, mergers and acquisitions, and insurance and securitization; financial markets, including equity, bond, foreign exchange and derivatives markets; and financial access, gauging commercial and retail access. Each of the seven pillars has many sub-pillars that contain the specific quantitative variables that constitute the FDI. Yet Turkey still needs, as the anonymous source underlines, in order to become an international financial hub to provide more transparent regulations, create a human capital to supply the dozens of specialized personnel needs of an IFC and implement policies related to taxation.
Although the government, regulators and the İMKB are motivated to increase the İMKB’s attractiveness to foreign investors, the slow progress diminishes İstanbul’s chances of becoming a regional center, let alone a global center, and the realization of the project will require hard work in order to cope with the tough competition put forth by many other candidates in addition to passive attitude reflected by the DPT.
Source: http://www.todayszaman.com/news-272511-istanbuls-bid-to-become-ifc-looks-cloudy-as-progress-continues-to-delay.html - Feb 26, 2012
For example, it was announced earlier that the IFC-İstanbul, the physical heart of the project which will be built in the Ataşehir neighborhood, aims to transform the city into a global center of finance. The project proposal has also convinced Ankara-based public banks such as Ziraat, Vakıf and Halkbank, and other public financial institutions like the Banking Regulation and Supervision Agency (BDDK), the Capital Markets Board (SPK) and the Turkish Banks Association (TBB) as well as the İstanbul Stock Exchange (İMKB) to move their headquarters from their current locations to İstanbul’s Asian side. However, even though the İstanbul municipality has been making great effort to realize the project, the State Planning Organization (DPT), which is in charge of the project, has not given many details about it, making people suspicious the project has been delayed.
Speaking to Sunday’s Zaman, a top official from an institution who wants to remain anonymous said that since the DPT has not given out many details on the project, it may appear that no progress is being made, and the government itself may not even be aware of the depth of the project. The official stated, “It looks like only the İstanbul municipality is working on the project by constructing a new metro line to the area to transport the large number of passengers expected every day, as well as new housing projects and shopping centers that are being built particularly in Ataşehir to prepare for the expected real estate demand.” He also expressed that he is hopeful about new İMKB President İbrahim Turhan and the expectation that the İMKB will gain more depth by attracting large-scale and international businesses with new policies implemented by the president. Noting the absence of a great deal of cash flow in the İMKB, he stressed that İstanbul will face tough competition especially from Moscow, which has large amounts of cash invested, in addition to European stock exchange centers that operate with about $15 trillion, compared to the İMKB, which operates with $700 billion at most. However, he concluded by saying İstanbul has great potential to become an IFC in the future, but it will require a great deal effort and take a longer time.
However, Dow Jones Indexes’ Senior Director of International Markets and Products Deborah Ciervo said in December that the İMKB is “more sophisticated” than its regional competitors in the Middle East, North Africa and Eastern Europe, and Moscow is not as accessible to foreign investors as the İMKB due to a less open and less favorable legal and regulatory framework.
The most important characteristics of an IFC are that it provides integrated financial services in all major financial market segments, including foreign exchange, money, capital (equities and bonds), banking and insurance, and is located in a developed country. It is been cited by experts that the seven pillars of the foreign direct investment (FDI) are: institutional environment, covering financial sector liberalization, corporate governance, legal and regulatory issues, and contract enforcement; business environment reflecting human and physical capital, taxes and costs of doing business; financial stability, encompassing the risks of currency, systemic banking and sovereign debt crises; banking financial services, measuring size, efficiency and financial disclosure; non-banking financial services, capturing initial public offerings, mergers and acquisitions, and insurance and securitization; financial markets, including equity, bond, foreign exchange and derivatives markets; and financial access, gauging commercial and retail access. Each of the seven pillars has many sub-pillars that contain the specific quantitative variables that constitute the FDI. Yet Turkey still needs, as the anonymous source underlines, in order to become an international financial hub to provide more transparent regulations, create a human capital to supply the dozens of specialized personnel needs of an IFC and implement policies related to taxation.
Although the government, regulators and the İMKB are motivated to increase the İMKB’s attractiveness to foreign investors, the slow progress diminishes İstanbul’s chances of becoming a regional center, let alone a global center, and the realization of the project will require hard work in order to cope with the tough competition put forth by many other candidates in addition to passive attitude reflected by the DPT.
Source: http://www.todayszaman.com/news-272511-istanbuls-bid-to-become-ifc-looks-cloudy-as-progress-continues-to-delay.html - Feb 26, 2012
