BDDK Mistake Cost the State 5-Fold

The restructuring cost would have been TL 8.2 quadrillion, while the bailing out cost was TL 40 quadrillion. The Commission accuses the TMSF and the Banking Supervision Regulation Agency (BDDK) and of being responsible for this staggering increase. The Commission claims that the TMSF at present is like an enormous State Economic Enterprise (KIT), and that it receives nearly one-third of the state budget. The Commission’s comprehensive report on the BDDK and TMSF focused on problems in the banking sector, and included the striking conclusion that forcing insolvent banks to declare bankruptcy was never seriously considered.

The TMSF took over 20 banks between 1997 and 2002, and all of them avoided bankruptcy by agreeing to cease transactions and refuse deposits. If the banks had been declared bankrupt, the Fund would have been obligated to pay only deposit insurance of TL 8.2 quadrillion. Instead, the Fund took the risky route of auditing and administering the banks.

Zekai Ozcinar, Suleyman Kurt / Ankara / TURKEY