Dervis Meets With Bank Officials

ISTANBUL, Jan 12 (A.A) - State Minister Kemal Dervis met on Saturday with officials of Treasury and Central Bank and some other bank personnel.
No statement was released prior to the meeting.
The law which foresees allocation of resources to banking sector will be debated at the meeting.
Besides Dervis, Central Bank Governor Sureyya Serdengecti, Treasury Undersecretary Faik Oztrak, Banking Regulation and Supervision Agency (BRSA) Chairman Engin Akcakoca, Turk Ekonomi Bankasi General Director and Deputy Chairman of Banks Association of Turkey Engin Akbaygil, State Banks Joint Executive Board Chairman Vural Akisik and general directors and high-level administrators of many banks are attending the meeting.
STATE MINISTER DERVIS SAYS THEY HOPE THAT BANKING SECTOR WILL BE STRONGER IN SIX MONTHS
Following his meeting with bank officials, Dervis told reporters that they informed the bank officials about the law on banking sector.
Dervis said that the law had not entered into force yet and noted that the president was examining it.
Dervis stated that the real aim of the law was to accelerate growth, facilitate investments and exportation in Turkey, and transfer credits to real sector.
The main target of a strong banking system was in fact all the above mentioned aims, Dervis said.
Dervis noted, ''the reason why the banking sector could not extend enough credits to the producing sector was the public deficits. The public sector prevented the flow of sources to real sector by taking sources from the market since it did not have a strong financial policy and public balance in the last decade. This is the biggest obstacle before the operation of banking system and growth of real sector. A strong financial policy and a saving state is the biggest guarantee for the real sector and it is also a precondition for the banking sector to take the credit.''
They would continue to debate the law with representatives of banking sector, Dervis pointed out.
Dervis stated that they also touched on the importance of medium and small scale enterprises.
''Small and medium scale enterprises are expecting support of not only Halk Bankasi but also private banks. The private banks are getting prepared for this. They have given a support at a certain extent. But, this support has to be increased. This is not only the duty of Halk Bankasi. Of course, Halk Bankasi will continue to do it. But, it is of utmost importance for the private banking to support small and medium scale enterprises to give credit to those enterprises within sound banking criteria,'' Dervis said.
Asked if President Ahmet Necdet Sezer had reservations, Dervis said, ''I met with the president as soon as the law was passed. He could not have the opportunity to examine the law. I gave information to the president in detail about the contents, targets of the law and how we are welcoming the year 2002. It was very beneficial for me. Of course, he will examine the law. It is an important and multi-dimensional law. I guess that the president also sees the importance of the law in regard to supporting real sector and in regard to strengthening the banking sector. He will also support the law.''
Upon another question, Dervis said, ''if we can achieve our targets successfully, there will be not any reason not to live such a deep crisis.''
BRSA UNVEILS ITS REPORT ON STRENGTHENING OF CAPITALS OF BANKS
Banking Regulation and Supervision Agency (BRSA) unveiled on Saturday its report on the strengthening of capitals of banks.
According to the report, only the banks, the capitalization ratios of which are positive, will be extended capital contribution within the framework of the initiatives to strengthen the capital of the banks.
In accordance with the report, it is planned to strengthen the capital structures of the banks, the capitalization ratios of which are below 8 percent, by a direct extention of capital support.
The activities of the banks which are extended assistance will be supervised by the appointment of an administrator. In order to eliminate the possiblity to harm the public by the developments in share prices, the shares of the partners controlling the bank will be taken as a guarantee.
According to the report, the real decrease in capital resources of private banks was 34.4 percent due to the economic crisis.
The report said that the credit volume stagnated by 7.9 percent.
In accordance with the report, the developments has made it necessary to strengthen solution strategy which will handle banking and real sectors together and to re-operate intermediation function of the sector.
The report said, ''the banking sector restructuring program will be strengthened with three new devices additional to the current method for the solution of the insolvent banks problem by transferring them to the Savings Deposit Insurance Fund (SDIF).''
These devices are providing liquidation of late receivables of banks and thus establishing asset management companies to make actives of banks liquid, operating debt structuring systems that wil ensure continuation of activities of real sector companies which have lost their power, and strengthening capital structures of banks.
According to the report, the restructuring process increased indefiniteness in economy.
The real financial structures of private banks will be put forth in the end of an equal, neutral and three-stage supervision.
Then, if some losses are found, bank general boards will convene and give a decision about the shareholders' undertaking bank losses, taking other measures, necessary cash capital allocation.
As the final stage, banks, the capitalization ratios of which are below 8 percent, will be extended direct capital support and thus, their capital structures will be strengthened.
The capital support will be made in two ways. The first way is to make a direct capital allocation to banks and the second is to make it as a credit guarantee simila to capital.
In order to raise capitalization ratio of banks to 9 percent, seven-year credit will be provided in return for bonds that can be turned into shares.
Banks, the capitalization ratios of which are 1 percent or which have positive capitalization ratio by transfers or mergers, can benefit from one of these two supports.
According to the report, the public will be a partner of the bank as much as the capital it gives to the bank.
The report noted that there was not any change in the strategy to solve the problems of the banks which had negative capitalization ratio.
According to the report, unlimited account insurance and full guarantee, open liquidity support and tolerant supervision and control policies are increasing the cost of restructuring of banking sector.
The report noted that restructuring strategy had features limiting costs of restructuring of banking sector, adding that support to be given to banks was not a transfer of a gratuitous or uncontrolled source.
MHP LEADER BAHCELI ''ESSENTIAL TARGET OF ARRANGEMENT REGARDED WITH REHABILITATION OF BANKING SYSTEM AND STRENGTHENING OF FINANCE STRUCTURES IS NOT TO SAVE THE BANKS OR TRANSFER MONEY TO BANKS''
Devlet Bahceli, the Deputy Prime Minister and leader of the Nationalist Movement Party (MHP), said on Saturday that the essential target of arrangement regarded with rehabilitation of banking system and strengthening of finance structures is not to save the banks or transfer of money to the banks.
Speaking before Central Executive Committee meeting of his party, Bahceli evaluated economic developments.
Bahceli said all the nation knew that economic crises atmospheres, which occurred in the past few years, was an extension of the past's wrong public finance, distorted monetary policies and inadequate economic infrastructure.
Pointing out that the 57th government was struggling hard to improve structural measures, Bahceli said their target was to make economic developments reach natural balances.
Bahceli said concrete steps have been taken to utilize from existing sources, and to support production sectors which had to shrink or stop production because of crisis, adding that changes and arrangements, regarded with rehabilitation and strengthening of banking system were the last examples of this.
Bahceli said the essential target of this arrangement was not to save the banks or tranfer of money to the banks.
Stressing that Turkey would overcome those difficult days, Bahceli said nobody has the right to be pessimistic pertaining to the future of Turkey.