HighIV Macro Policy & Sovereign Debt11 November 2026, Wednesday
Fund probe reaches the top of Türkiye's banking regulator as Kavcıoğlu resigns
Şahap Kavcıoğlu, head of the Banking Regulation and Supervision Agency (BRSA), asked President Erdoğan on 11 November to relieve him of his post. The resignation came two days after the agency's deputy head and two department heads were arrested; the number of people detained in the probe has risen to 123.
Kavcıoğlu announced on social media on 11 November that he had asked Erdoğan to release him from his duties so that the institution would not suffer further damage. According to a Karar report timed at 10:59, the Presidency had not announced a decision by then. Kavcıoğlu was governor of the central bank from March 2021 to June 2023 and was appointed to the BRSA in June 2023.
According to a Turkish Minute summary, an Istanbul court on 9 November arrested BRSA deputy head Muhammed Erişen and Murat Yönaç, general manager of Adil Katılım Bank. The heads of the BRSA's third and fourth departments were arrested in the same wave. On 11 November former Takasbank general manager Yunus Arıncı and two more finance executives were arrested, bringing the total to 123. Takasbank is the central institution for clearing and custody of securities transactions; Arıncı had left the top job in early November.
At the centre of the allegations are questions raised in early November by Savcı Sayan, a former AKP mayor of Ağrı. Sayan alleged that Kavcıoğlu sought 20 billion lira to rescue Pusula Holding and Katılımevim, and in return arranged 35 billion lira of credit through Takasbank. In an interview with Sözcü on 11 November, Kavcıoğlu denied taking bribes and said he had filed a criminal complaint against Sayan. Neither the 20 billion nor the 35 billion lira claim could be independently verified.
The probe began in September when some funds could not meet redemption requests, and 131 funds run by seven portfolio management companies were put into liquidation. A report citing Reuters says the funds gathered more than $20 billion of assets over three years and reached about half a million investors. Justice Minister Akın Gürlek said on 9 November that 464 suspects had been identified and the assets of 386 people and 116 entities frozen. Capital Markets Board chairman Mahmut Sütçü had resigned on 19 October, citing health reasons.
Talay assessment
Bottom line
The probe no longer covers just one group of funds; it now reaches the top of the body meant to supervise them. Two departures, from the Capital Markets Board in October and the BRSA in November, leave a gap in the supervisory architecture. The market is not yet translating this into country risk: the CDS eased to 237.18 on 10 November. The only clear reaction came in the 10-year yield, which rose 31 basis points on 11 November.
Likely effects
- Supervisory credibilityNegativeWeeks
With both regulators' chiefs gone within a month, both may run under interim management; the profile of the new appointees will be the first signal on supervisory independence.
- Bond marketNegativeWeeks
The 10-year yield rose from 33.05% to 33.36% on 11 November; extended-maturity investors may be pricing institutional risk before the CDS does.
- Participation financeNegative1–6 months
The arrest of an Adil Katılım Bank executive and the naming of Katılımevim raise outflow risk and the supervisory burden on interest-free finance institutions.
Possibilities, ranked
- 1Swift appointment, limited contagion55%
Erdoğan accepts the resignation and a new BRSA head is named quickly; the probe continues but does not spill into credit markets.
Watch: BRSA appointment in the Official Gazette and TR CDS staying below 250 basis points
- 2Probe spreads to banks30%
Arrests reach executives at other banks or state finance institutions, and deposit and fund outflows begin.
Watch: Participation bank deposits in the BRSA weekly bulletin and new arrest announcements
- 3Resignation not accepted15%
Kavcıoğlu is kept in post or the process drags on; the agency keeps operating under uncertainty.
Watch: Presidential statement on the resignation request
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- TR CDS 5Y (10 Nov)▼ 237.18 bp
- TR 10Y (11 Nov)▲ +31 bp