Moody's says Turkey's BDDK decision to tame loan growth positive

ANKARA (A.A) - July 5, 2011 - International credit rating agency Moody's said Tuesday Turkish bank watchdog's decision to pre-empt credit overheating was positive.
On June 20, Turkey's Banking Regulation and Supervision Agency, or BDDK, raised its provisioning and risk-weight requirements for unsecured consumer loans in an attempt to tame loan growth.
"We consider BDDK decision credit positive," Moody's said in an analysis.
The measure aims to contain rising household leverage and address the increased credit risk from longer term unsecured loans, it said.
Moody's analysts added: "BDDK's decision is yet another credit positive and pre-emptive action by Turkish authorities to subdue loan growth and to cultivate appropriate risk-adjusted pricing in a banking system showing early signs of overheating and declining net interest margin."