UPDATE 2-Turkey to guard against risks on expats' funds

lunedì 13 ottobre 2008 13:04

(Releads with comment on expat deposits)

By Hatice Aydogdu

ANKARA Oct 13 (Reuters) - Turkey said on Monday it would guard against risks of money laundering associated with a plan to draw in expatriates' funds to help the nation weather the global financial crisis.

Millions of Turkish people live in European countries, mainly in Germany, the Netherlands and Austria. Some economists estimate the value of their savings at over $100 billion.

"We will be taking on all the risk," Prime Minister Tayyip Erdogan said on Monday when asked by reporters about the plan to draw in expatriate deposits. He gave no further details.

Some economists and bankers have questioned the plan, given the failure of similar schemes in the past, and expressed concerns that it could be vulnerable to money-laundering.

Turkish banks are viewed as better placed than many European and U.S. rivals because of their relatively strong balance sheets and limited foreign exposure. Erdogan said at the start of October Turkey planned to maintain its current deposit guarantee of 50,000 lira ($35,800) per person.

Finance Minister Kemal Unakitan called in an interview last week for Turkish citizens not to borrow in foreign currency. The lira IYIX= has weakened 20 percent against the dollar this year to 19-month lows. It rebounded some 3 percent on Monday.