Skip to content
Subscriber Only

Turkey Eases Capital Rules on Banks, Suspending Mark-to-Market

  • Temporary rule to continue until prices ‘normalize’: regulator
  • ‘Unfair erosion’ to capital ratios amid lira, market turmoil
Bloomberg business news
Turkey Slaps Additional Tax on U.S. Goods

Turkish regulators took an unconventional step to support the nation’s beleaguered banks, temporarily suspending the effect of day-to-day securities losses on how their financial strength is measured.

The new rule suspending mark-to-market calculations on capital adequacy ratios will continue until prices of securities “normalize,” the nation’s banking regulator said in a document sent to banks on Tuesday. The "recent speculative volatility in markets" caused an “unfair erosion" in banks’ capital strength, it said. Under mark-to-market accounting, portfolios must reflect assets’ current market values rather than their book values.