FRANKFURT: The European Central Bank is increasingly concerned about Eurozone banks’ exposure to Turkey, the Financial Times reported on Friday, sending bank shares lower as the Turkish lira hit yet another record low against the US dollar.

The ECB, which declined to comment on the FT report, is said to be chiefly concerned about BBVA, UniCredit and BNP Paribas. They have among the largest operations in Turkey, although their local subsidiaries’ contribution to the overall balance sheet is relatively modest.

The Turkish lira has resumed its prolonged slide as a rift between Turkey and the United States widens and concerns grow about President Tayyip Erdogan’s grip on monetary policy under a powerful new executive presidency.

A supervisory review by the ECB does not yet see the issue as critical but it is concerned that borrowers may not be hedged against the lira’s weakness, a worry since foreign currency loans make up about 40 per cent of the Turkish banking sector’s assets, the FT said.