Nobel laureate economist says Turkish financial sector less vulnerable than U.S. and E.U.

NEW YORK/ANKARA. February 6. KAZINFORM - U.S. Nobel-winning economist Joseph Stiglitz said that Turkish financial sector was less vulnerable than the United States and European countries in the recent global financial turbulence thanks to measures taken after the local economic crisis in 2001; Kazinform has learned from Today's Zaman.

Speaking to the Anatolia news agency about relations between Turkey and the International Monetary Fund (IMF), and impacts of global financial crisis, Stiglitz said that re-arrangements in Turkish banking industry after the crisis in 2001 had now become beneficial. Columbia University professor Stiglitz said Turkish banks and firms were not very much affected by the recent crisis as they used less external loans when compared to other countries. He also said that mortgage loans were not common in Turkey which was another fact that helped Turkey be less affected. Of course, Stiglitz said, Turkey would definitely be negatively affected by the stagnation in Europe which was the biggest trade and tourism partner of Turkey. However, he stated that Turkey would be one of the less affected countries in Europe. Commenting on Turkey-IMF relations, Stiglitz said classic stand-by arrangements were not enough to overcome the current global crisis, adding that IMF also advised deregulation to countries which was one of the sources of current financial crisis. Most of the countries that recently made stand-by arrangements with the IMF had no other choices, Stiglitz said. However, he stated that Turkey had different conditions than those countries as it was in a better position regarding public debts. Stiglitz, who is known for his critical view of globalization, free-market economists and some international institutions like the IMF and the World Bank, advised Turkey to cut a deal with the IMF taking into account global conditions and its own conditions. Otherwise, he said, rejecting a stand-by arrangement with the IMF would be a better choice for Turkey if the arrangement would not fit current global conditions.