The past 10 months have been some of the worst the Turkish economy has faced in years. Once-explosive growth is slowing, inflation is above target, the lira has plummeted against the dollar and foreign investors are steering clear. Meanwhile, concerns about external and internal liabilities – including a high current account deficit and an increasingly indebted population – are growing. The International Monetary Fund labelled Turkey the most vulnerable emerging market in its most recent financial stability report.
The country's financial sector has outpaced the overall economy for some time, but it has not escaped the upheaval and executives are settling in for a tough few months. “[This year] is going to be a difficult year for the banking industry,” admits Carlo Vivaldi, executive director and deputy CEO of local bank Yapi Kredi from his Istanbul office.
