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Turkey committed to Islamic finance alternative, says Fin Min

Turkish Finance Minister Mehmet Simsek said Turkey is committed to developing traditional as well as Islamic banking.

Turkish Finance Minister Mehmet Simsek said, "My government is committed to developing Turkey's own traditional markets and having a significant component of alternative Islamic finance in place."

Speaking at the opening ceremony of the International Forum on Financial Systems in Istanbul, Simsek said it was important to have such platforms and to debate ways of avoiding economic crises as well as other alternative sources, in particular sustainable finance and sustainable development. 

"As Islamic finance involves sharing loss, it is a relatively more resilient system, so in some ways, this is an important aspect to look at. No credit is expanded to basically speculative products or derivatives," he said. "I think there is an environment that is conducive to the development of Islamic finance."

He said there was a demand for Islamic finance in the west and investors were looking for alternative investments that are not correlated.

“This is really important because typically, if you really want to diversify and not put all of your eggs into one basket, you need to look at instruments that are not highly correlated," he added.

He pointed out that that was the reason for his belief in the likelihood of Islamic finance to make the global financial system more resilient. 

"Islamic finance products are likely to grow not only in Muslim countries but also in the West. Clearly there is a huge scope for development."

- Coordination at G-20 or financial stability level important

Simsek said that coordination at the G-20 or financial stability level was very important and added "We are grateful to the G-20 in a way that has helped coordinate these policies and helped leading nations cooperate and coordinate policies to avoid another great depression." 

- Turkey has prospects for more growth

Simsek said that the factors which had helped Turkey escape the crisis included political stability, a degree of significant progress in having price stability, sound fiscal position, relatively low household leverage, a well capitalized, supervised and regulated banking sector, low public sector debt, moderate corporate leverage, flexible exchange rate and a good macro-financial framework.

Simsek expressed his hope for more growth prospects with solution of the Kurdish issue. 

"I am convinced Turkey will have a new engine for growth. Now the southeastern part of Turkey has been catching up with the rest, a new source of life to maintain this momentum."

The International Forum on Financial Systems is organized by Independent Industrialists' and Businessmen's Association (MUSIAD), BORSA Istanbul, Statistical, Economic & Social Research and Training Centre for Islamic Countries (SESRIC), Participation Banks Association Banks of Turkey (TKBB) and Islamic Development Bank (IDB) with the theme of "Sustainable Finance for Sustainable Development" in Wow Convention Center in Istanbul on September 11-12.

 

Anadolu Agency (AA)