Turkish banks selling Greek junk bonds, report claims

ANKARA- Hürriyet Daily News

Turkish banks have allegedly sold Greece’s junk bonds to hundreds of investors, daily Star claimed in a report yesterday.

The daily cited officials saying the Turkish economy administration has started investigating how large the amount of such bonds circulating in the hands of Turkish investors could be. The Banking Regulation and Supervision Authority (BDDK) and other institutions have already started working in this regard, Star reported.

The BDDK did not respond to a Hürriyet Daily News request to confirm the information claimed in the report, by the time the paper went to print yesterday.

Some of the investors buying the Greek junk bonds were reportedly unaware of the origin of the bills, whereas others purchased the bonds believing that “the EU would save Greece from going bankrupt,” the Star report said. The issue leaked to the media after Turkish investors filed complaints against banks, according to the claims.

Officials said there were six banks that intermediate Greek bonds in Turkey, according to the report, and that currently there is no risk of losing from such bonds as they are guaranteed by the Greek state, Star wrote.

Economy administrators say Turkey’s exposure to Greek bonds risks is insignificant when compared with the exposure of European banks, the report says