Turkey, Syria, Jordan, Lebanon to sign banking cooperation deal



Central Bank Governor Durmu? Y?lmaz

Turkey will sign a regional cooperation agreement in the field of banking with three of its southern neighbors with whom it envisions establishing a single market, an example of regional economic cooperation that many say is the Middle East version of the European Union, the head of the country’s central bank said on Monday.
Central Bank of Turkey Governor Durmu? Y?lmaz addressed bankers from Syria, Lebanon, Jordan and Turkey at a conference titled “Enhancing Shamgen Banking: Turkey, Syria, Lebanon and Jordan” in ?stanbul yesterday. “As a result of this agreement, trade and investments between these countries will be supported and facilitated,” he said, adding that the planned agreement will also complement free trade and visa-exemption agreements signed earlier between the four countries.
The foreign ministers decided on June 10 of last year to set up a high-level cooperation council to boost existing legal mechanisms in free trade and visa exemption deals to improve trade cooperation between them. The council plans to develop a long-term strategic partnership and to create a zone of free movement of goods and persons among them. “Although this conference is a step toward improving relations between the banking sectors of Turkey, Syria, Lebanon and Jordan in the short term, it is expected to contribute to the formation of a single market with the inclusion of other countries in the region in an area circumscribed by the Persian Gulf, Red Sea and the Mediterranean,” Y?lmaz said during his speech at the conference.
The countries’ aspirations to establish the planned single market in the Middle East are interpreted as the sign of the rise of an EU-like regional economic integration. Even the name of the conference proved how appropriate those interpretations are. The word “Shamgen” is a combination of “Sham,” the way the name of the Syrian capital of Damascus is pronounced in Turkish as well as in Arabic and with the meaningless “gen” to make it sound like the Schengen area, which comprises the territories of the 25 European states that act like a single state when it comes to international travel without internal border controls and visa requirements.

For Y?lmaz, Turkish banks can make “a substantial contribution” to the improvement of the banking systems in the region. At the end of January of this year, the total assets of Turkish banks amounted to TL 1.02 trillion ($641 billion) with a 24.8 percent year-on-year rise while the volume of loans they extended increased to TL 536.6 billion with a two percent year-on-year increase. Their monthly profit totaled TL 1.5 billion the same month.

Also speaking at the conference, Turkish Regulation and Supervision Agency (BDDK) President Tevfik Bilgin said relations between the countries in terms of banking investments are insufficient at the moment. “Investments made by Syrian, Lebanese and Jordanian bankers in Turkey and investments by Turkish banks in these three countries are very small,” he said. Central Bank of Jordan Governor Faris Sharaf said financial integration will “catalyze” the economic integration of the four countries. “We all know that we have to harmonize our standards [in banking] and update [banking] regulations to ensure no obstacles remain [to that end],” he said.

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