UK's vote advantageous for Istanbul International Finance Center

Published 26.06.2016 23:16
Updated 26.06.2016 23:17

Following the U.K.'s decision to withdraw from the EU, London will begin losing its position as a leading global finance center – which will bring advantages for Turkey. Banking Regulation and Supervision Board (BDDK) Chairman Mehmet Ali Akben said that the state of London, which ranks first among global finance centers, has become unclear, adding, "Some world-renown companies might move their headquarters from London and revise their investment decisions as they will lose the advantages of being subjected to EU regulations." Stressing that such a situation will greatly benefit Istanbul Finance Center, Akben said Turkey must take advantage of it. Akben underlined that works on strengthening the legal infrastructure of Istanbul Finance Center, increasing its financial product and service diversity and creating a simple and efficient taxation system are in progress.

He said the U.K.'s secession from the union will downgrade its premier position as a global finance center. At $258 billion, the finance sector constitutes 12 percent of the U.K.'s gross domestic product. More than two million people work in the sector, which constitutes 7 percent of total employment in the U.K.

Akben also assessed the new draft omnibus bill that has been offered by the government to Parliament, saying the draft, which consists of the cash repatriation law, will bring fresh sources for banks and might help increase the currently shrinking credit volume. Akben noted that if the draft bill passes, banks will have a more advantageous source of funds than international syndicates and foreign currency loans. "Sources to be derived through the cash repatriation law will be deposited in banks – which might benefit incomes in the sector. As BDDK, we support the regulation."

Akben further stated that the impact of the interest rate cut by the Central Bank of the Republic of Turkey (CRBT) might soon be reflected in consumer loans over the upcoming period. Unlike previous cash repatriation laws, if the new regulation is enacted it will not impose any taxes. According to the regulation, naturalized and legal persons must declare their overseas cash, gold, foreign exchange, securities and other capital market instruments to banks or intermediaries by Dec. 31, 2016.

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