On account of political uncertainty, bank securities in Poland and Turkey have led to investor losses. According to a Bloomberg Intelligence analysis, the negative impact of various macroeconomic conditions became apparent in emerging markets. Within this year, many emerging economies faced various problems such as inflation, depreciating national currencies and/or slowing economic growth. As two of such countries, Turkey and Poland face political uncertainty and parity volatility, which are likely to affect bank profitability in these countries. Moreover, at 14 percent each, Turkey and Poland are the leading countries on the decline on the Emerging Markets European Index. The election on Oct. 25 in Poland and on Nov. 1 in Turkey has resulted in the increase in volatility. For Poland, it is anticipated that the profitability of its banks is set to diminish by 11 percent in 2015. In Turkey, before the June 7 general elections, foreign investors sold Turkish bonds worth $3.5 billion in line with the increasing economic uncertainty, which lowered investor confidence. The possibility of a government not being able to form after the November elections may increase the pressure on the Turkish lira as well.
