Turkey's 'genius' central banker faces high expectations
Source: AFP
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"Brilliant Turk" or "the genius": Turkish media are gushing over new central bank governor Hafize Gaye Erkan, who soared through the ranks of US financial firms but now faces the monumental task of curbing inflation and stabilising the falling lira.
The first woman to lead Turkey's central bank, who is in her forties, has a stellar resume that includes major roles with the likes of Wall Street titan Goldman Sachs and diplomas from Princeton and Harvard.
She climbed to the top of the corporate ladder at California-based First Republic Bank, where she became co-chief executive and was expected to take over from founder Jim Herbert until she unexpectedly resigned in December 2021.
Crain's New York Business magazine named her on its list of "40 under 40" rising business stars in 2018.
"Gaye is a financial whiz with a deep sense of social responsibility, reflecting her immigrant experience and lessons learned from the banking industry's role in the 2008 financial crisis," Kathryn Wylde, CEO of the nonprofit Partnership for New York City, was quoted as saying in Crain's.
Erkan served on the board of directors at the nonprofit.
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After quitting First Republic, she became CEO of US real estate finance and investment giant Greystone last year, but she quit just six months later.
Erkan has said that her dream was to return to Turkey one day to "serve my country", according to local media.
She has taken on a tough job, with markets eager to see whether she will have the power to reject President Recep Tayyip Erdogan's unorthodox monetary policies.
Her predecessors followed Erdogan's calls for the central bank to lower its interest rates in order to combat high inflation -- the mirror opposite of what policymakers in other nations have done.
Top student
Erkan's mother taught mathematics and her father was an engineer.
She was top of her class in industrial engineering at Istanbul's Bogazici University and was only 21 when she earned a scholarship from Princeton University in the United States, where she earned a PhD in operations research and financial engineering.
She is also a graduate of Harvard Business School's Advanced Management Program.
Despite her high-level education, Erkan once complained in a discussion later recounted by a columnist that she couldn't find an internship in Turkey because of widespread favouritism -- or "torpil", a Turkish word meaning secretly using one's influence over important people to get things done.
After her studies, she joined Goldman Sachs in 2005, first as an associate and then managing director. She led a team and developed investment algorithms at the legendary firm.
She was hired by First Republic in 2014 where she earned the titles of senior vice president, chief investment officer and co-chief risk officer.
Her resignation as co-CEO in December 2021 was considered a surprise.
More than a year later, the lender plunged into crisis as it reported a loss of more than $100 billion in deposits in the first quarter of 2023.
US financial authorities took control of the bank in May and sold it to JPMorgan Chase in what became the second biggest bank failure in US history.
While pro-government media such as CNN-Turk called her "brilliant" and Hurriyet saw her as a "genius", others said her role at First Republic was a blotch on her resume.
"Some unfounded praise for her in the Turkish press suggests that they aim to hide her experience of failure at First Republic," says economist Selva Demiralp in an article published on BBC Turkce.
Source: AFP
