I wonder if a default on some loans from European banks might be hinted at. That would cause a few problems as a lot of the loans recently (in the last couple of decades) used to fund Turkeys economic expansion resulted in tens of billions of Euros exposure for European banks. That saying about owing the bank ten thousand is a problem for the lendee, while owing the bank ten billion is a problem for the lender.
Spain, France, U.K., U.S., Germany, Italy, Japan were listed as being the most exposed, totalling $205.7 billion. Of that, Spain holds 41%, France holds 18%, and the rest hold between 7% and 9% each.
It would appear that Spain and France have the most to worry about, although of course individual banks anywhere could have a large exposure of their own. If Turkey default on their loans, bank bail outs, especially in Spain are not out of the question. There have been numerous press reports in reputable media for some months now about investor concern over EU bank exposure to Turkey. Here's an example.
Euro zone banks hammered for Turkish exposure
Investors dumped euro zone bank shares on Friday on concerns about their exposure to Turkey, as the lira fell to yet another record low with a defiant government showing few signs it is ready to take decisive steps to stabilise the currency.
The euro zone bank sell-off was exacerbated by a report in the Financial Times that the European Central Bank is increasingly concerned about some lenders, particularly BBVA (BBVA.MC) of Spain, UniCredit (CRDI.MI) of Italy and BNP Paribas (BNPP.PA) of France, as they have some of the largest operations in Turkey among euro zone banks.