An Empirical Analysis of the Risk-Taking Channel of Monetary Policy in Turkey

Ozsuca, Ekin Ayse
Akbostancı Özkazanç, Elif
This article investigates the bank-specific characteristics of risk-taking behavior of the Turkish banking sector as well as the existence of risk-taking channel of monetary policy in Turkey. Using bank-level quarterly data over the period 2002-2012 a dynamic panel model is estimated. We find evidence that low short-term interest rates reduce the risk of outstanding loans; however short-term interest rates below a theoretical benchmark increase risk-taking of banks. This result holds for macroeconomic controls and external factors as well. Furthermore, in terms of bank-specific characteristics, our analysis suggests that large, liquid, and well-capitalized banks are less prone to risk-taking.


An Empirical Analysis of the Bank Lending Channel in Turkey
Ozsuca, Ekin Ayse; Akbostancı Özkazanç, Elif (2013-07-01)
The purpose of this paper is to empirically analyze the role of the banking sector in monetary policy transmission in Turkey covering the period 1988-2009. By exploiting dynamic panel data modeling approaches, the heterogeneity in banks' lending response to changes in policy interest rates is analyzed. Given the changes in the policy stance and developments in the financial system following the 2000-01 crisis, the analysis is further conducted for the two sub-periods, 1988-2001 and 2002-2009, to examine whe...
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Kılıç, Abdurrahman; Özmen, Erdal; Department of Economics (2015)
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Başkurt, Özge; Özmen, Erdal; Department of Economics (2005)
This study aims to investigate currency substitution and financial dollarization in Turkey. The extend of dollarization in Turkey appears to be very high according to both the conventional currency substitution and the recently developed financial dollarization measures. This has serious policy implications as a source of financial fragility through currency/maturity mismatches and balance sheet effects. The empirical part of this study contained an investigation of the long run relationships between the va...
Citation Formats
E. A. Ozsuca and E. Akbostancı Özkazanç, “An Empirical Analysis of the Risk-Taking Channel of Monetary Policy in Turkey,” EMERGING MARKETS FINANCE AND TRADE, pp. 589–609, 2016, Accessed: 00, 2020. [Online]. Available: