Ken Wattret, chief European economist at IHS Markit, said in a note on Aug. 14: “The banking sector is one of the transmission channels of the problems in Turkey spilling over to Europe more broadly. Banking sector exposure varies considerably depending on the country.”

Spanish banks have by far the biggest collective exposure, according to IHS Markit, at more than 30 percent of total foreign claims on Turkey.

“This share has risen markedly in recent years, more than tripling since the first quarter of 2013. French banks account for the next highest share, which has been relatively stable at around 15 percent. Next is the UK banking sector, which accounts for around 7 percent of total foreign claims, less than half the share back in the first quarter of 2013. Greek banking sector exposure is negligible currently, but accounted for 13 percent of total foreign claims in the first quarter of 2013. By way of comparison, the share of U.S. banks in total foreign claims is similar to that of the UK, at just under 7 percent, and has also fallen markedly in recent years,” Wattret said.

Another transmission channel is trade exposure to the Turkish economy, but here again Turkish trade plays a relatively small role in the trade regimes for most of the countries in the region, with Bulgaria being the most exposed as its exports to Turkey account for 5 percent of total export.

“As with the banking sector, European countries’ export exposure to Turkey varies considerably. For Bulgaria, Greece and Russia, Turkey accounts for over 5 percent of total goods exports, a significant share. Exposure is much less significant elsewhere,” says Wattret.