Uncertain Future for Islamic Finance After Turkey Elections

President Recep Tayyip Erdogan’s plans to grow Islamic banking in Turkey may be facing an uncertain future. The ruling AK Party - formerly led by Erdogan - failed to win enough seats at the general election to form a single-party government. The result was a blow to the power of the man who has driven the industry in Turkey. The vote raises the possibility of a minority administration, a coalition government or another election in the $800 billion economy. Stocks, bonds and the lira plunged the day after the vote. Turkey’s cabinet appointed Mehmet Ali Akben to head the Banking Regulation and Supervision Agency in May. Akben is known to be strongly supportive of the government’s participation banking agenda. Still, political uncertainty could drag on.