Turkish Banks Resist Calls to Curb Consumer Loans During Faceoff

Turkish lenders are resisting demands from the banking regulator to curb growth in consumer credit, which authorities blame for fueling inflation and the current-account deficit, Bloomberg News reported. The executives of top Turkish banks faced off against Mehmet Ali Akben, head of the banking regulator, last Thursday, according to the minutes of their meeting, a copy of which was seen by Bloomberg. The major difference that emerged in the debate centered around a recent uptick in borrowing by consumers.Akben attributed the demand for retail loans to their low cost relative to corporate credit and said the interest-rate gap between them has become too narrow. Banks countered by saying that growth in consumer loans is still below inflation and the risks they present are at “reasonable” levels. The meeting was held as part of regular discussions with lenders, and included Alpaslan Cakar, head of the Banks Association of Turkey and chief executive officer of the country’s largest state-run lender, Ziraat Bankasi AS. The regulator and the banking association declined to comment. Read more.