Turkey didn’t learn enough lessons

urkey learnt the fewest lessons from the Lehman crisis while Russia has done the most to protect itself from global turbulence, the European Bank for Reconstruction and Development’s chief economist has said.

“For the emerging markets, the main lesson is that you need to build deep and meaningful financial markets in your own country,” EBRD’s chief economist Sergei Guriev said.

“Otherwise, because of problems in some other country you may have an external financing shock and you will have a crisis.”

“[Turkey has] a high level of dollar debt, a lack of independent decision making by the central bank, a lack of inflation targeting which results in wiping out euro denominated financial markets, shorting the duration of lira financial instruments and reinforcing this burden of indebtedness,” Guriev said.

“This is very unfortunate, because it could have been avoided.”

It echoes warnings from the likes of the Bank for International Settlements and IMF about countries stacking up too much dollar-denominated debt when the global rush to slash interest rates made it look ultracheap.