If Turkey implodes, here's who else will get hurt
With financial turmoil in Turkey roiling the country's assets, analysts are busy contemplating which other countries could be exposed and what this could mean for international investors.
Turkey has been in economic difficulties since the start of the year. Its currency has lost about 33 percent of its value on the back of large fiscal stimulus, growing inflation and a hefty current account deficit. There's also been intervention from President Recep Tayyip Erdogan.
European banks
Media reports suggested Friday that officials at the European Central Bank are concerned over southern European banks, which have lent significant amounts of money in Turkey. This suggests that investors holding stock in European banks could be at risk. The ECB declined to comment on the reports.
Data from the Bank for International Settlements (BIS) — often called the central bank of central banks — shows that Spanish banks are owed $83.3 billion by Turkish borrowers; French lenders $38.4 billion; and banks in Italy are owed $17 billion. Regulators in Europe are reportedly worried that the weaker currency will lead to defaults in foreign loans.dogan on the central bank's policy decisions which continues to surprise investors and accentuate the fall in the currency.
Shares of UniCredit, BNP Paribas and BBVA fell around 3 percent Friday morning, after being cited as the European banks with the highest exposure to Turkey. This dragged the wider market down with the pan-European Euro Stoxx 600 down 0.7 percent by 9:00 a.m. London time and the banking index dropping 1.3 percent. Carsten Hesse, a European economist at Berenberg, said in a research note that some euro zone banks are under pressure "due to their direct equity exposure to Turkish banks or participation in syndicated loans — a loan offered by a group of lenders."
Japan and the US
When asked about the impact of the ongoing troubles in Turkey, Timothy Ash, a senior emerging markets strategist at Bluebay Asset Management, told CNBC via email that "it's likely mostly banking exposure at this stage."
However, he added that exposure is "pretty international." "European, U.S., Japan, China, Middle East — everyone," he added.
https://www.msn.com/en-us/money/markets/if-turkey-implodes-heres-who-else-will-get-hurt/ar-BBLK0WB?li=BBnbfcN
No fan of Erdogan but I'm wondering why Drumpf is taking this time to make a stand. He seemed perfectly okay (in fact he was standing right by him then) with Erdogan's goons beating up protesters in this country.
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