Turkey has lost US$22 billion of reserves since the beginning of December, which is roughly the size of its current account deficit. Of course, the decline in reserves also may reflect FX market intervention.

Turkish banks are pretty well shut out of the market as of May, as evidenced by Garanti bank’s recent performance.

The run on Korean money market funds, reported by Bloomberg this morning, is due to Korean purchases of Qatar bank bonds “backed by bank deposits,” whatever that means. Some of that may have been re-lent to Turkey.

It seems quite possible that all sorts of dodgy financial mechanisms will be exposed and dissolve in the present Turkish crisis. The possibility of a disorderly collapse of the Turkish economy has to be taken seriously. That has important political and strategic ramifications, for example, for Berlin.