CMB Liquidation of 131 Funds Leaves 455,000 Investors Squeezing Corporate Financing

The crisis that began after the Capital Markets Board (CMB) liquidated 131 funds belonging to seven portfolio management companies on September 17 is now threatening the real economy. According to an assessment relayed by DW Türkçe, finance expert Prof. Dr. Evren Bolgün disclosed that 600 billion lira was withdrawn from money market funds in a single month.

According to Central Registry Agency data, 455,758 individual investors were held in the funds subject to the CMB's liquidation decision; 170 additional funds were also suspended from trading. Although initial investor payments have begun, Bolgün warned that the process could make it harder for companies to roll over their maturing debts.

The risk runs directly through the credit channel: money market funds invest in bonds and commercial paper issued by companies. Heavy outflows from these funds reduce demand for those instruments, pushing issuance rates higher. For a mid-sized exporter crossing the Galata Bridge every day, this means the closure of a second borrowing window on top of bank credit.

Economists list three factors that will determine the economic cost of the crisis: companies' borrowing conditions, foreign capital flows, and the speed of the liquidation process. The CMB previously caused a temporary liquidity squeeze during the 2013 fund regulation overhaul, but the scope of that liquidation never approached today's scale.