Financial Times: Gaye Erkan has little room for maneuver

The British financial newspaper Financial Times wrote an analysis about the new governor of the Central Bank, Hafize Gaye Erkan. The newspaper claimed that Erkan will have little leeway as he tries to turn things around in the economy.

In the analysis, it was stated that Erkan is an expert in creating complex models that analyze risks on the balance sheets of major financial institutions. The news also indicated that the views of Erkan, who has become the fifth central bank governor since 2019, stand in stark contrast to Erdogan’s economic views.

The article recalls that former Central Bank Governor Şahap Kavcıoğlu cut interest rates from 19 percent to 8.5 percent in two years, and that the bank burned approximately $25 billion in foreign exchange reserves this year to support the lira, which will leave very little room for manoeuvre. ”.

WE WILL WALK A THIN LINE

Enver Erkan, chief economist at Dynamic Investment Securities, whose views are included in the news, said: “The message received and the expectations formed so far point to a strong policy transition.”

It was also stated in the news that the duty of Central Bank Governor will definitely test Erkan’s diplomatic skills. “Erkan will have to walk the fine line between putting Turkey on a more sustainable policy path and attracting foreign investors by appeasing a president who has little patience with economic policy,” the analysis said.

Wolfango Piccoli of consultancy Teneo said: “After years of mismanagement, Erkan needs to rebuild the administration.” “Like many other key institutions, the Central Bank has lost its independence and has been emptied of Erdogan’s drive to centralize power,” Piccoli said.

FT’S GAYE ERKAN BIOGRAPHY

The article also included an extensive biography of Erkan. The following statements about Erkan were used:

“Born in Istanbul in April 1979, Erkan’s parents, who are teachers and engineers, developed his numerical skills from an early age. A software neighbor taught him the C++ programming language

After graduating from Boğaziçi University’s Department of Industrial Engineering in 2001, Erkan earned his PhD in financial engineering with a thesis on risk management from Princeton University.

Erkan, a dual Turkish-American citizen, later spent almost ten years at Goldman Sachs, where he advised on stress tests for major financial groups.

Erkan met Jim Herbert, the founder of the First Republic, there in 2014. Starting to work here, Erkan quickly rose through the ranks of the First Republic. American Banker named her one of the industry’s “Most Powerful Women to Watch” in 2019.

In the summer of 2021, Erkan became co-head of First Republic and was seen as a candidate to replace Herbert at the company. However, his tenure at the head of the company was short and eventful. Erkan was unable to get along with other top executives and left First Republic at the end of 2021. The institution has been at the center of the banking crisis ever since.

After leaving First Republic, Erkan briefly served as co-chairman of New York commercial real estate firm Greystone, was appointed in June 2022 and left in December of the same year.

Now, as the first female governor of Turkey’s central bank, she will have a new opportunity to use her experience in risk management.”