ISTANBUL – Under the leadership of Deputy Prime Minister Ali Babacan and supported by the Arab Banking Cooperation and the Banks Association of Turkey, the third Arab-Turkish Banking Dialogue has finally begun.

During the inaugural speech, Mukim Öztekin, head of the Banking Regulation and Supervision Agency (BDDK), emphasized that the gathering's agenda includes promoting financial sustainability. Öztekin said authorities made direct and indirect interventions to maintain financial sustainability even in the U.S. within financial markets. He also said financial markets have both advantages and risks, chief among them that the whole economy can be negatively impacted if trouble arises in the market. "Breakdowns in the financial sector have a huge impact on society," he said. "The main point of discussion on emerging countries is political sustainability. Any fluctuation on political sustainability can create a breakdown and an uncertainty in national markets.

In addition, the uncertainty will lead to fragility and financial instability. Therefore, political sustainability cannot be achieved without financial sustainability, which is considered one of the main elements of economy. We feel sorry about the uncertainties within the MENA [Middle East and North Africa] region. There are many internal conflicts. Due to the current uncertainty, the conditions of regional countries and the Islamic geography have been worsening.

It may also bring with it a high cost for us and future generations. The political and financial problems within the MENA region make the expected solution more difficult to solve. The region's growth rate is under the average rate of emerging countries. It is not possible to mention financial progress under such conditions." Emphasizing that Turkey was not affected heavily by the worldwide financial crisis, Öztekin said, "This success has been achieved due to contributions by the public and private financial institutions under the leadership of Turkish government."

Drawing attention to the strength of the Turkish banking sector, Öztekin indicated that Turkey will not hesitate to take every necessary step and measure in order to reduce public pressure. He also said the history of the Turkish banking sector was much more successful than the banking sectors in emerging countries. Although slightly less established, the Turkish banking sector complies with the European standards.

Secretary General Union of Arab Banks Bassam Fattouh said Turkey and Arab nations are getting closer to each other as the trade volume between Turkey and Arab nations totalled $27 billion in 2013.

Indicating deposits in the region have been growing during the last 14 months, Fattouh said there was $1.6 trillion in 430 banks in Arab nations at the end of 2012. "As of the end of 2013, the figure increased to $1.7 trillion [in] deposits," Fattouh said. "Even with the tense atmosphere in the region, we consider the increase as significant."

The chairman of the Bank Association of Turkey, Huseyin Aydin, said the financial sector in Turkey is still in a transitional period and has continued to grow.

Aydin said the total assets in Turkish banks total $813 billion and more than 50 percent of the increase of Turkey's balance sheet was financed by domestic deposits.

Nine banks headquartered in member countries of the Union of Arab Banks have become operational in Turkey and 11 banks headquartered in Turkey have become operational with their branches and representation offices in Arab countries, Aydin said.
Turkey's foreign trade volume with member nations of the Arab banking union was $45 billion in 2013. "This amount is still low, as it constitutes only 12 percent of Turkey's foreign trade volume," Aydin said.