Turkey banking regulator head resigns in fund crisis fallout

Detailed summary

The fund scandal erupted in mid-September when several high-profile asset managers failed to meet redemption requests. | World News

Kavcioglu has not been accused of any wrongdoing. The regulator, known by its Turkish initials BDDK, didn’t immediately respond to a request for comment.

The probe into alleged market manipulation involving investment funds has expanded in recent weeks to politicians and senior financial officials. Those arrested include a deputy chairwoman of Erdogan’s ruling AK Party, the chief executive officer of the stock exchange, the former CEO of the securities custodian Takasbank and the BDDK’s deputy chairman.

The BDDK “has absolutely nothing to do with the fund issue,” Kavcioglu told local media in an interview published before his resignation request on Wednesday. He added that regulator “is one of Turkey’s most respected institutions.”

The fund scandal erupted in mid-September when several high-profile asset managers failed to meet redemption requests, in what the justice minister has termed a “Ponzi-like scheme.” Regulators then ordered the liquidation of 131 funds affecting about half a million investors, while authorities arrested dozens of finance executives.

Kavcioglu, a former central bank governor, has been at the helm of the banking watchdog since 2023.

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