İstanbul is Preparing For Becoming an International Financial Center
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- 23 March 2020
Sound steps are taking in many areas such as transportation, infrastructure, service, and particularly in the nance sector in Turkey in order to make Istanbul a global financial center
Turkey has delivered a government will on making Istanbul one of the most prominent international financial centers since 2009. In the past 10 years, a serious amount of work has been done in Istanbul Financial Center (IFM) project and a signi cant amount of process has been made. Updating the Capital Markets Law is the main work that has been done in the mentioned works. In this scope, by reviewing the regulations regarding the law, market regulations, and various regulations, the integration of the financial processes in Turkey to the global ecosystem.
Also, the Code of Obligations and the Commercial Code have been updated according to the inter- national standards. Within Borsa Istanbul, both financial futures and gold and share and debt instruments market were reorganized. In this point, it is good to mention that turning the aforesaid institution to a private company by removing its public status. International Arbitration Center that provides great conveniences to national and international firms in agreements and disputes has entered into service. Therefore, all of the regulations on making Istanbul a financial center is made actual. The realization of a serious “banking reform” in Turkey in 2001 is also another important factor. From that period, which the whole world was affected by the global economic crisis, to today, the banking sector in Turkey has become more dominant.
CAPITAL MARKETS SHOULD BE IMPROVED
Considering in global scale, we see that capital markets and banking- nance system in developed economies have almost equal shares. When evaluated specific to Turkey, capital markets fell behind the banking system. In this respect, Turkey needs to improve the capital markets and increase the relevant institutions. We know that the government has assigned the Ministry of Development about this and within the strategic plan of the project, all actions and operations have been examined. When looking at the point that reached today, we can say that the road that should be taken is achieved to a large extent. It is foreseen that this extensive project will be realized in 2022.
QUALIFIED HUMAN RESOURCES AND SERVICE RANGE ARE MUST
In this March, a conference was organized in Istanbul by the Finance Office of the Presidency. Global Financial Centers Index General Manager Mark Yeandle who participated in the conference as a speaker talked about the necessary conditions of making cities to financial centers. According to this, there should be a human resource that is competent enough to offer financial services to everywhere in the world. Also, it is important to have easy transportation to the financial institutions that will be active in the region and accommodation options. Even though Istanbul is in an advantageous position in this and many subjects, the transportation problem in the city is non-negligible. Even though the Government made progress in order to solve this problem, I think the current infrastructure should be more improved. Also, in the growing cities, industrial institutions should be positioned outside the city limits. Because if a city grows and expands, this means the need for the service sector is increased as well. Therefore, Istanbul needs more space for the service sector can operate.
We can say that there are not many steps left in financial services that form the main subjects of the conference. Although in this area physical service production should be started by now, however, we provided the formation of the mentioned institutions. As a matter of fact, Istanbul has proved its progression on becoming a financial center by rising number 59 from 68 in the Global Financial Centres Index that announced after the conference. Even though the aim of Istanbul to be in the top 25 among the global financial centers seems assertive for today, it has the power to achieve this with its region and advanced financial base.
THE PROCESS IS SPEEDING UP IN IFM PROJECT
As is known, Turkey has passed in presidential government from parliamentary system two years ago. In the meantime, the IFM project has slowed down. Lastly within this project that transferred to the Finance Office of the Presidency, Istanbul Financial Center Master Action Plan Conference was held on July 11-12. After the conference that the IFM project has been reviewed, President of the Finance Office of the Presidency Göksel Aşan has made evaluations about his goals for the project and his tendencies. Aşan told that two topics will come forward in the preparation process of the project in front of us, and one of them is.
FinTechs that implements new financial technologies and the other one is Islamic nance. Especially these two subjects are important in terms of providing a competitive advantage to Turkey along with Istanbul. Also, at the conference, there are additional four topics. These topics are; reviewing legal infrastructure and frame; creating a study area on the interest-free financial economy; improving the quality and quantity of the financial products; regulating incentive and tax mechanism.
And this is a truth that the international image of a city is primarily important in terms of achieving its goals towards it. And the image is determined by providing security for the visitors and opportunities in terms of technology. When it comes to technology, we must not forget about the cryptocurrencies that became a part of economic service and financial life today. Istanbul can easily enter into top 25-30 financial centers in the world, if only regulation and development works about a cryptocurrency system are made in Turkey.
FIRST, THE ENVIRONMENT OF CONFIDENCE MUST BE ACHIEVED
In order to provide all of these conditions, I think that Turkey has to maintain its political stability. Otherwise, this kind of financial and economic activities will be interrupted, everybody knows that. Because, either the capital is local or foreign, it is timid and cannot hold on in areas that it considers as not safe. Therefore, at first, Turkey has to provide a safe and transparent environment. In order to improve the country and integrate into the global ecosystem and turn Istanbul to a financial center; firstly, an environment of confidence, then by embracing the IFM project the undertakers, affairs, and goals should be made clear within a solid plan.
Participation Banks Association of Turkey General Secretary Osman Akyüz