The drop in the price of oil might appear as a windfall for energy-importing Turkey, and moves to reflate the eurozone yet another piece of good fortune for the country. However, Turkish banks have learned not to trust in luck. Instead, for more than a decade, the banking community has placed its chips on prudence, innovation and hard work. It is a wager that has more than paid off.
The result is that a well-supervised and strong financial sector has become the principal engine of Turkish growth. This is all the more remarkable given the notorious rut the economy found itself in 2001, when a dozen undercapitalised banks were forced to exit the system at a remarkable cost of 32% of gross domestic product. Since then, and despite the 2009 global crisis, the economy has continued to expand, on average, by 5% annually.
