Turkish legal changes not related to Halkbank - watchdog

Changes to Turkey's banking law announced last week have nothing to do with an ongoing money-laundering case in the U.S. against an employee of state-run Halkbank, the head of the country' banking watchdog said.

The legal ammendments are to bring the law into line with other Turkish legislation, said Mehmet Ali Akben, the head of the Banking Regulation and Supervision Agency (BDDk), according to BloombergHT, a partner of Bloomberg Television in Turkey. There are also no plans to merge Halkbank with Emlakbank, a state-run lender focused on real estate, he said.

The legal changes, published in the government's Official Gazette on Thursday, allow banks to end their legal status and transfer assets to third-party companies without shutting down operations.

Hakan Atilla, deputy chief executive of Halkbank, will appear in a New York court on Nov. 27 accused along with businessman Reza Zarrab of illegally funneling hundreds of millions of dollars through the U.S. banking system to break the sanctions. Atilla's former boss, Süleyman Arslan, and ex-Economy Minister Zafer Cağlayan have also been indicted but remain outside the country. Zarrab, a Turkish-Iranian, has left jail and may have turned state's witness.

Turkish Deputy Prime Minister Mehmet Şimşek said at the weekend that U.S. investigations into the sanctions-busting only relate to one Turkish bank. The government has labelled the case as a political attack. A Turkish court last week started its own investigation into the U.S. trial judge and prosecutor