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Turkish President Recep Tayyip Erdogan on Friday warned against using problems affecting a small share of investment funds to discredit Türkiye’s broader capital markets, saying this would undermine the economy and the country’s development.
Speaking at the 13th TIM Innovation Week program at the Halic Congress Center in Istanbul, Erdogan said authorities should address wrongdoing in the fund market without frightening investors or damaging confidence in the wider financial system.
“Using this issue as a shield to fire at Turkish capital markets, intimidate investors, frighten them or even drive them away is not the right approach,” Erdogan said.
He said Türkiye could not accept the criminalization of its entire capital market because of problems linked to investment funds.
Erdogan said capital markets play a vital role by creating a financial bridge between savers and the real economy.
He said that bridge was particularly valuable because financing could be provided through partnerships and without creating debt or relying on interest.
According to Erdogan, the role of capital markets in supporting the real economy has become more important since the 2008 global financial crisis, as the banking sector became less willing than before to provide financing.
He also highlighted the importance of capital markets for technology and innovation, saying such investments operate differently from other sectors because of high research and development costs and long project development periods.
For that reason, he said financing technology and innovation was more suited to capital markets than traditional banking.
Erdogan said flexible and risk-sharing capital market instruments contributed significantly to the innovation ecosystem, supporting projects from the idea stage through commercialization.
He described venture capital investment funds as one of the most important financial supporters of Türkiye’s National Technology Initiative.
Erdogan said problems had emerged in only 4.6% of the total number of funds and warned against using them to condemn the entire system.
“Terrorizing all capital market instruments because of a problem that emerged in only 4.6% of the total number of funds would, let me speak openly, undermine Türkiye’s economy and sabotage our country’s development march,” Erdogan said.
“No one has the right to do this, whether they are a politician or a journalist. We will not allow such opportunism.”
Erdogan called for a determined fight against greed and fraud but said efforts to clean up the markets should not damage healthy parts of the system.
“Let us all fight decisively against the greedy and fraudsters,” he said. “But while removing the harmful elements from our capital markets, let us not damage the healthy organs.”
He also urged against blocking financial channels used by companies that produce, export and create jobs.
Erdogan called on public figures, particularly those holding positions of responsibility, to use more careful language.
“No matter what they do, we will continue to act with the seriousness and responsibility of the state,” he said.
“We will continue to place the rights, interests and well-being of our nation above every other consideration.”
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