U.S. Markets open in 2 hrs 16 mins

Euro zone banks punished for Turkish exposure

Reuters India
Euro zone banks punished for Turkish exposure

Euro zone bank shares tumbled on Friday on concerns about their exposure to Turkey as the lira fell to yet another record low with a defiant government showing few, if any signs, it is ready to take decisive steps to stabilise the currency. A widening rift with the United States, its main NATO ally, and President Tayyip Erdogan’s grip on monetary policy under a new powerful executive presidency have helped to drive the lira down by more than 35 percent this year, a particular worry for Turkish banks as over a third of their lending is in foreign currencies. The bank sell-off was exacerbated by a report in the Financial Times that the European Central Bank is increasingly concerned about some lenders, particularly BBVA of Spain, UniCredit of Italy and BNP Paribas of France as they have some of the largest operations in Turkey among euro zone banks.