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Turkish banking association: Fines issued to banks over interest rate-rigging unfair

banks association of turkeyThe Banks Association of Turkey said on Saturday that the decision by the nation’s competition board to fine banks a record $620 million for interest rate-rigging was unfair.

“The banking sector…has a central role in the economy and is functioning under highly competitive conditions as a result of its infrastructure,” the association said, Reuters reports. “The competition board’s decision didn’t consider this different structure of the sector at all.”

Following an investigation that began in November 2011, Turkey’s Competition Board fined 12 banks for their collusion on interest rates, fees and deposit rates. The fines were somewhat less than the $2 billion expected by industry officials.

While the Board could have imposed fines of up to 10 percent of turnover, it has never issued sanctions of more than 0.5 percent of turnover in previous rulings. The regulator said that individual fines ranged between 0.3 percent and 1.5 percent of turnover.

“The board disagreed…that a cartel was formed and therefore the fines were lower,” a senior official said, according to Reuters.

The heads of the banks, which include Akbank, Denizbank, Finansbank, Garanti Bank, Halkbank, HSBC, ING Bank, Isbank, TEB, Vakifbank, Yapi Kredi and Ziraat Bank.

Banking shares were down for most of February amid concerns about the fines, but Deputy Prime Minister Ali Babacan said that the fines would be “fair and measured,” pushing bank shares towards recovery, Reuters reports.

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