ISTANBUL
Turkish Deputy Prime Minister for economy Ali Babacan on Thursday said that laws governing the banking sector should be made without regard to populism or short-term thinking.
In a speech at the Association of Banks of Turkey's 57th general meeting in Istanbul, Babacan said neither banking lobbies nor policy makers should promote regulations which, for the sake of short term profits, would harm the economy in the long term. As Turkey’s chief economist, he underlined that the economy is based on confidence, which takes years to build but can be destroyed very quickly.
"Regulations governing the banking sector should be made very carefully, delicately and with rational considerations," said Babacan, who praised cooperation between the economy's regulatory institutions and banks.
Babacan said that government measures to restrain excessive usage of credit cards has served its purpose, as the charges related with purchases by installments had dropped by around nine billion Turkish Liras since February, when the measures came into effect.
Babacan added the decrease in consumer loans and increase in corporate loans were very positive trends for the Turkish economy, whose policies are structured to increase savings and real estate investment while aiming to decrease the foreign trade deficit.
Narrowing Turkey's wide foreign deficit is the government's primary aim.
Turkey's Banking Regulation and Supervision Agency has imposed restrictions since February on the previously popular installment plans for payments on goods, most of which are imported.
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