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Turkish Participation Banking

P. Wouters
P. Wouters

The Special Finance Houses (SFH) were introduced in Turkey in 1983 in response to the 1982 financial crisis and as part of financial reforms pushed by the IMF. The SFHs were created to mobilize funds outside the conventional banking system and attract Gulf investment. This positioned Turkey as a pioneer in Islamic banking decades before it became widespread. Today, Turkey's four participation banks manage around $17 billion in assets across West Africa, Southeast Asia, Europe and the GCC.

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Paul WOUTERS Participation Banking in Turkey Taking the front stage The Special Finance Houses SFH (zel Finans Kurumlari FK) were in- troduced in 1983, right after the 1982 financial crisis in Turkey. At that mo- ment, under impulse of the I.M.F., the Government of Prime Minister zal embarked on a broad financial market reform and liberalization policy. The specific reasons for the legislative introduction of the SFH were : an attempt to mobilize funds that stayed outside the conventional bank- ing system and that were kept hidden under pillows of families that op- posed to interest An effort to create economic linkages to the cash rich oil-producing Arab states and to attract Gulf investment The initiative appeared to beas history showsof an uncanny visionary nature as it placed Turkey right in front of what would develop into contem- porary Islamic banking. Back in 1989, a Turkish scholar would be present at the Dow Jones-fatwa that globalized so-called Islamic Indexes and that confirmed the open doors for Islamic participation to the conventional stock markets. In 2006, Turkey produced with the Dow Jones DJIM Turkey Exchange Traded Fund ETF a global premier and nowadays 4 relevant Participation Banks (Katlm Bankalar) together command roughly 17 billion USD in assets with a physical reach from West Africa to Southeast Asia and from Europe to the GCC. This 1.5 Hrs. presentation gives you an introduction in the development of Islamic banking in Turkey and poses questions at the sidelines of the newly envisaged Istanbul Financial Center-initiative, that appears to A legal practitioner and consultant, Paul be missing out on the possibility of establishing Istanbul Islamic WOUTERS has been living in Istanbul-Turkey Capital Markets. This would allow Turkeywhilst becoming a for several years. Hands-on experience com- regional financial interchangeto reach out to the European con- bined with academic research and new avail- tinent and to confirm the historical ties with the Central Asian able market data make this presentation a must see for all interested in secular Islamic republics., markets that are in demand of ethical banking. banking. Explore the roots .. Analyze the differences with your local setting Learn and develop new strategies. Yapi Kredi Plaza C Blok Kat 4 34330 Istanbul-Turkey Latest Turkish market data. mail info@bener.av.tr Information : pwouters.law@gmail.com web www.bener.av.tr

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Turkish Participation Banking

  • 1. Paul WOUTERS Participation Banking in Turkey Taking the front stage The Special Finance Houses SFH (zel Finans Kurumlari FK) were in- troduced in 1983, right after the 1982 financial crisis in Turkey. At that mo- ment, under impulse of the I.M.F., the Government of Prime Minister zal embarked on a broad financial market reform and liberalization policy. The specific reasons for the legislative introduction of the SFH were : an attempt to mobilize funds that stayed outside the conventional bank- ing system and that were kept hidden under pillows of families that op- posed to interest An effort to create economic linkages to the cash rich oil-producing Arab states and to attract Gulf investment The initiative appeared to beas history showsof an uncanny visionary nature as it placed Turkey right in front of what would develop into contem- porary Islamic banking. Back in 1989, a Turkish scholar would be present at the Dow Jones-fatwa that globalized so-called Islamic Indexes and that confirmed the open doors for Islamic participation to the conventional stock markets. In 2006, Turkey produced with the Dow Jones DJIM Turkey Exchange Traded Fund ETF a global premier and nowadays 4 relevant Participation Banks (Katlm Bankalar) together command roughly 17 billion USD in assets with a physical reach from West Africa to Southeast Asia and from Europe to the GCC. This 1.5 Hrs. presentation gives you an introduction in the development of Islamic banking in Turkey and poses questions at the sidelines of the newly envisaged Istanbul Financial Center-initiative, that appears to A legal practitioner and consultant, Paul be missing out on the possibility of establishing Istanbul Islamic WOUTERS has been living in Istanbul-Turkey Capital Markets. This would allow Turkeywhilst becoming a for several years. Hands-on experience com- regional financial interchangeto reach out to the European con- bined with academic research and new avail- tinent and to confirm the historical ties with the Central Asian able market data make this presentation a must see for all interested in secular Islamic republics., markets that are in demand of ethical banking. banking. Explore the roots .. Analyze the differences with your local setting Learn and develop new strategies. Yapi Kredi Plaza C Blok Kat 4 34330 Istanbul-Turkey Latest Turkish market data. mail info@bener.av.tr Information : pwouters.law@gmail.com web www.bener.av.tr