The new boss of MB will take care of the remains

Treasure Finance and Finance Minister Mehmet Şimşek is claimed to want Hafize Gaye Erkan, who works as a top executive in the field of finance in the US, for the new Central Bank (MB) presidency. While MB President Şahap Kavcıoğlu is said to have already started tidying up his room, 41-year-old Erkan will go down in history as the first female and youngest MB president with a history of 82 years, if it is named. If President Şahap Kavcıoğlu, who is the symbol of a period in which the MB’s independence was completely destroyed, is removed, the new president will face the serious damage caused by the New Economic Model.

THE CRISIS HAS BEEN AGENDA

After graduating from the Department of Industrial Engineering at Boğaziçi University, Hafize Gaye Erkan received his PhD in Financial Engineering from Princeton University in the US. Erkan, who worked for Goldman Sach, one of the leading investment banks in The US for many years came to prominence again with the First Republic Bank crisis. Because the bank where Erkan worked until December 2021 became the most striking institution in the banking crisis in the US. According to sources who spoke to the Financial Times in March 2023, when the problems at the bank began, there was a management crisis during Erkan’s departure from the bank.

ADMINISTRATOR NOT FOUND

First Republic Bank founder Jim Herbert, 79, left the bank in December 2021 due to ill health. A month later, Erkan, who was ‘posed as his successor’ by him at the bank, also left the company. According to the British newspaper story, there was tension between the management and Hafize Gaye Erkan before December 2021. After Erkan left office, he struggled to find a senior manager for months. In fact, a source who gave an opinion to the Financial Times and knew the bank well said: “They didn’t have a leader who could change direction when interest rates rose. They didn’t see the tsunami coming,” he said.

Gained ‘authority’, failed to persuade

Also drawing attention was the “full clearance” detail in the Financial Times report, which gave extensive coverage of Gaye Erkan’s bank exit process. In the process, Erkan warned First Republic Bank executives of the coming storm and insisted on making preparations for the US Federal Reserve’s (Fed) rate hike process. However, Erkan, unable to convince management, especially CEO Jim Herbert, decided to leave. The board of directors appointed Gaye Erkan, but did not allow him to make decisions with full authority. When Erkan left, the Fed had not yet started raising interest rates. And for the banks, a crisis was not on the horizon. The fact that Treasury bond interest rates peaked with the Fed’s interest rate hike led to a difficult period, especially for depository banks, and then some banks were driven into bankruptcy.