Türkiye's liquidation of investment funds worth $18.3 billion will not put pressure on Borsa Istanbul Stock Exchange (BIST), as regulatory changes should prevent any contagion risk, Treasury and Finance Minister Mehmet Şimşek said Friday, adding that authorities would monitor the market closely.
Türkiye's Capital Markets Board (SPK) mandated Friday the country's largest public and private banks, Ziraat and Işbank, to oversee the liquidation of 131 investment funds managed by seven portfolio companies.
"There is no widespread systemic risk. There is no structural problem in the stock market or the fund market. 90% of the fund market continued to function healthily," Şimşek told the private broadcaster NTV.
Şimşek said that authorities will monitor markets, although he said regulatory changes should have reduced the risk of volatility recurring.
Authorities stepped in to ensure market stability after a fund liquidity crunch triggered steep falls in Türkiye's main stock index this week.
The authorities' actions helped the index recoup some of its losses Thursday, but it is still down around 8% since last Friday's close. The BIST 100 was down around 1.5% at 0754 GMT, after closing 2.95% higher Thursday.
Şimşek also said there was a clear need for stricter rules in the non-bank finance sector and that authorities are working on regulations.
