Loss of reputation in the banking sector
The banking sector is discussing the recent loss of reputation they have experienced in the eyes of the public. They were already the target of politicians and consumers because they were obtaining excessive profits; their morale was down last week due to the huge fine that was imposed on them because they violated the rules of competition.
The banking sector believes that this fact is being disregarded: Turkey was less affected by the global crisis because of the strong structure of its banking system. They remind others that after the economic program of the year 2000 and the consolidation experienced in the banking system, the system has become healthy again. Also, the high level of bank profits had an enormous contribution to this stage that has been reached. They report that banking is an institution of confidence and that the profits obtained were being added to the capital and the present healthy structure was obtained due to that. Also they claim that if the profits were compared to the size of the capital, then it would be seen that the profit rates in the banking sector were much lower than other sectors.
This strong structure of the banking system is affecting macroeconomic balances positively and it was this factor that enabled the economy to manage the crisis with so few scars, the banking sector executives said. They shared that these factors are being ignored both by politicians and the people.
The huge fine given by the Competition Authority is being assessed within this context. The banking sector says that they have also made mistakes, but that the rules of the Competition Authority were not suitable for the banking system. Because of this, an image of violating the competition appears, they believe. When viewed from this point, they think that the Competition Authority has made a rather political decision, an institution where the political authority has a huge influence. In a way, they believe, this was engaging in a behavior as if preparing for imposing an extra tax on the banking sector.
Legislative amendments at the door
This disturbance has been conveyed to the economy administration. It is now being considered that the general rules applied to the banking sector by the Competition Authority should be detailed specifically for the sector. Also, it is being considered that competition conditions should be detailed and that the monitoring of the practice should be given to the Banking Regulation and Supervision Agency (BDDK). The banking sector is expecting a legislative amendment on this matter in a few months.
Besides that, the transaction costs that banks change under the name of fees and commissions draw huge reaction especially from consumers. For this reason, politicians from time to time issue statements that target the banks. On the other hand, banks think that all of these are charged because a service was being provided and that by the nature of the transactions executed, they should be regarded as only normal.
In order to eliminate this negative perception, banks have conveyed to the economy administration the necessity to make a legislative study about fees and commissions. Work in underway to set up a totally transparent fee and commission system, in other words, where the consumer will be able to see clearly and decide.
In short, while the banking sector reacted against the fines that have put them in a financially difficult situation they are, on the other hand, repairing the loss of reputation they have experienced.