Turkey’s problems could affect Europe

The Turkish lira has been under pressure on concerns about the outlook for the country, and is currently at a two year low. There is also a worry that Turkey’s problems could lead to wider contagion in emerging markets, and also spill over into Europe’s banking system.

Reuters reports that analysts at Man Group believe Spanish banks in particular are vulnerable to the problems in Turkey. The agency quotes Man as saying: “As the Turkey crisis persists and investors worry about contagion in the rest of the emerging markets, we believe the European banking system generally, and Spain especially, could be at risk.”

Spain’s Ibex is currently one of the biggest losers among European markets, down 0.75%.