American Marconi Wireless News - Erkan: Former Wall Street star overseeing Turkey's troubles

Turkey's powerful leader, Recep Tayyip Erdogan, has fired a handful of the 44-year-old Goldman Sachs alumna's predecessors for following the basic rules of economics and raising interests rates to fight inflation.

Erkan did just that after chairing her first policy meeting on Thursday, hiking the benchmark rate from 8.5 percent to 15 percent.

It was a huge jump and the first rate rise in 27 months.

It also fell short of the increase to 20 percent or higher demanded by the markets. The lira hit new lows against the dollar after losing 2.5 percent of its value.

But Erkan sounded unphased in a bank statement that promised to raise rates "as much as needed in a timely and gradual manner" until Turkey's cost-of-living crisis is brought under control.

"This is a sign that the new governor is looking to tread carefully to avoid a clash with President Erdogan," said Hamish Kinnear, analyst at Verisk Maplecroft risk consultancy.

"The last central bank governor to hike interest rates was fired by the president after less than five months in the post."

- Stellar resume -

Erdogan turned to Erkan during a government overhaul that followed a May general election in which he was nearly punished for overseeing Turkey's worst economic crisis of his 20-year rule.

The first woman to lead Turkey's central bank, she brags a stellar resume that includes diplomas from Princeton and Harvard.

Born in Istanbul, she ranked 26th out of more than 1.3 million students who take Turkish university entrance exam every year.

She was the valedictorian of her graduating class at Istanbul's prestigious Bogazici University, where she studied industrial engineering.

After receiving scholarship offers from nine top US universities, Erkan chose Princeton, where she completed a two-year PhD program in operations research and financial engineering.

She is also a graduate of Harvard Business School's advanced management program, and the Stanford Graduate School of Business Executive Program in Leadership.

- 'Financial whiz'-

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.

In 2014, she was hired by First Republic Bank, climbing to the top of the corporate ladder at California-based bank, where she became co-chief executive and was expected to take over from founder Jim Herbert until she unexpectedly resigned in December 2021.

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.

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.

After quitting First Republic, she served on the board of directors of the US jewelry company Tiffany & Co for two years.

She became CEO of US real estate finance and investment giant Greystone last year, but she quit just six months later.

Despite her 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.

Erkan has said that her dream was to return to Turkey one day to "serve my country", according to local media.

D.Moore--AMWN