Fund Investigation on the Stock Exchange and Trust Crisis Debates
Following the deepening fund crisis triggered by the freezing of assets of 46 companies and 18 funds on the stock exchange, economists warned that the cost of the loss of confidence on investments and the financial system will be immense.
Following the fund investigation and asset freeze decisions in capital markets, while the ruling wing describes the situation as a temporary problem, experts emphasize that the cost of the ongoing trust crisis to the economy and investments will be heavy.
Loss of Trust in Capital Markets
Despite regulations regarding the stock exchange and messages from the economic management, the impact of the loss of trust created in capital markets on investments is being debated. It is stated that savings could be withdrawn from the system and directed towards foreign currency and physical hoards.
While it was recently announced that the assets of 46 companies, 18 funds, and 42 individuals were frozen in the fund investigation, Borsa İstanbul closed last week with a 2.90 percent decline.
Statements from the Ruling Wing
Minister of Treasury and Finance Mehmet Şimşek gave messages to foreign investors, and Vice President Cevdet Yılmaz to domestic investors, stating that the fundamentals of the economy are solid.
Although Cevdet Yılmaz defined the events as a temporary problem in a limited area and argued that the capital market will be stronger than before, economists approach this view with reservation.
Security and Cost Warning from Economists
Prof. Dr. Serap Durusoy stated that the process is not just a fund crisis, but that we are facing a deep trust problem with economic, legal, and political dimensions.
Pointing out that while there is a decline in funds according to CBRT data, increases have been recorded in foreign currency and TRY deposits, experts draw attention to the fact that money entering the savings system will decrease.
Contagion Risk and Lack of Audit
Prof. Dr. Murat Birdal stated that the failure to take steps earlier regarding speculative transactions needs to be accounted for, noting that the crisis carries the risk of spreading to the entire stock exchange.
Stating that investors in need of cash may also have to sell solid stocks, Birdal emphasized that it is difficult to attract international investors without solving structural problems.
Rent Economy and Liquidation Process
Prof. Dr. Erinç Yeldan argued that the root of the problem lies in the imbalances of the national economy and the structure transformed into a rent economy, saying that the current environment prepares fertile ground for speculative rent capital.
Economist Güldem Atabay, on the other hand, drew attention to the scope of the investigations and the liquidation process, stating that it is difficult to overcome the systemic trust crisis due to the weakening of institutions.