Gov’t steps up efforts to move Central Bank to İstanbul

The Central Bank of Turkey will be moved from Ankara to İstanbul in a bid to make the city an international financial hub. Durmuş Yılmaz (inset)

December 03, 2010, Friday/ 16:34:00

A motion to move the Central Bank of Turkey to İstanbul has been sent to Parliament. To make İstanbul a financial center, the headquarters of public banks Ziraat, Vakıf and Halk Bank and other public financial institutions like the Banking Regulation and Supervision Agency (BDDK), Capital Markets Board (SPK) and Turkish Banks Association (TBB) are considering a move to İstanbul.

According to the motion introduced by ruling Justice and Development Party (AK Party) parliament members Eyüp Ayar, Veysi Kaynak and Abdullah Çalışkan, the statement “The Central Bank of Turkey is headquartered in Ankara” will be cut from the current law. In this way it is possible to move the central bank to another city, which in this case is İstanbul. The administrative center of the Turkish central bank will be located in Ankara until the motion is passed in Parliament. The plan is to move all facilities and departments of the central bank to İstanbul in two years time while assembly meetings continue to be held in Ankara until the central bank has moved completely.

The offer by some parliament members to move headquarters of some Ankara-centered public financial institutions to İstanbul was on the agenda in 2008, but with the global financial crisis this was postponed. Speaking to Today's Zaman, State Minister Ali Babacan emphasized that Turkey has been “tested and proved” to have a safe financial sector during the global financial crisis. He noted that big and developed countries have increased their tax rates in order to cope with rising budget deficits, whereas Turkey has proved to have a strong and stable financial sector. “The declining budget deficit in Turkey shows there will be some tax cuts in the near future,” said Babacan. “Many international finance giants complain about rising tax rates in the country where they are established. They are even considering moving their operations to another country. In this framework, the government has plans to make İstanbul an international financial center comparable to Dubai and London.”

Moreover, TBB President Ersin Özince had recently visited Prime Minister Recep Tayyip Erdoğan to seek support for making İstanbul a financial center. Özince said that Turkey is the only country in its region with a huge money and capital market during the opening ceremony of the Kapalıçarşı (Grand bazaar) gallery. “The strong banking sector in İstanbul is a strong reason why İstanbul should be an international finance center. If İstanbul becomes a financial center, Turkey will belong to the world's biggest economies,” said Özince who is also the General Manager of İşbank.

The AK Party administration took a strategic step towards making a financial center of İstanbul by preparing the “İstanbul International Finance Center Document and Action Plan” and sending it to the Ministry of Justice to strengthen the legal infrastructure of the paper.

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