Turkey's banking regulator chief offers to resign over $20bn scandal

Resignation request

Şahap Kavcıoğlu, head of the banking regulator BDDK and a former central bank governor, asked President Recep Tayyip Erdoğan to relieve him of his duties on 11 November. In a post on his personal X account he said the request was made so the institution would not suffer further damage from recent claims about the BDDK and himself. He thanked Erdoğan for entrusting him with the role. It was not clear whether the president had accepted the resignation, and the BDDK did not immediately respond to requests for comment. Kavcıoğlu has not been publicly identified as a suspect in the investigation.

A scandal reaching the ruling party

The affair, which media have dubbed the Fonzi crisis, is a stock market scandal put at $20bn that erupted in mid-September 2026. Several high-profile asset managers failed to meet investors' redemption requests after share price gains that investigators suspected were manipulated. Fatma Betül Sayan Kaya, a former deputy chair of Erdoğan's ruling Justice and Development Party, was remanded in custody in early November on suspicion of insider trading, and she denies wrongdoing. Other people implicated include the former chief executive of Istanbul's stock market and senior executives at the state-controlled insurer Türkiye Sigorta. Anadolu reported that the former chief of Turkey's securities settlement and custody bank was arrested on 11 November. Some suspects have denied wrongdoing, while others have not responded publicly to the allegations.

Kavcıoğlu's defence

In an interview with the Sözcü newspaper before stepping down, Kavcıoğlu was asked whether he was a suspect in the fund investigation and answered by defending the regulator.

“The BDDK is one of Turkey's most respected institutions. It has no connection to the fund business whatsoever.”

He added that every bank has a portfolio company, and he argued that it was unfair to accuse the regulator because İktisat Katılım had one. He said the regulator could be criticised over its bank licensing, but that linking the licence to the fund was a different matter. On the bank that Pusula Holding set up, he said the approval process had three stages, and that after fund withdrawals had begun the regulator halted the bank's start of operations on 3 August and did not grant operating permission. He said the banking licence had been granted at the end of 2024 with approval from the Capital Markets Board, SPK. He also said he had not approved a capital increase for Tera in 2026 and had no contact with Tera before 9 September.

Erdoğan and the investigation

Erdoğan, who has been angered by the scandal, said in early November that people no one would have expected had become involved, and he promised to go after those responsible. Justice Minister Akın Gürlek said the probe had uncovered a "comprehensive criminal organisation". Kavcıoğlu previously led the central bank, where he carried out Erdoğan's unorthodox policy of cutting interest rates despite accelerating inflation. Annual price rises peaked at more than 85% during his tenure, while the lira fell sharply in value. No decision on the resignation request had been announced, and the BDDK had not commented.