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

Download

index.pdf

Date

2016-03-01

Author

Ozsuca, Ekin Ayse
Akbostancı Özkazanç, Elif

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

193
views

167
downloads

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.

Subject Keywords

Panel data, Turkey, Risk-taking channel, Transmission mechanisms, Monetary policy

URI

https://hdl.handle.net/11511/41072

Journal

EMERGING MARKETS FINANCE AND TRADE

DOI

https://doi.org/10.1080/1540496x.2015.1047300

Collections

Department of Economics, Article

Suggestions

OpenMETU
Core

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...
An empirical analysis of the monetary transmission in theTurkish economy Çavuşoğlu, A. Tarkan; Özmen, Erdal; Department of Economics (2002) The purpose of this two-essay thesis is to empirically investigate the characteristics of the monetary transmission mechanism in the Turkish economy. The first essay is an attempt to test the presence of a bank lending channel of monetary transmission by exploiting a dynamic panel data modelling approach. The empirical investigations are focused on the bank lending behaviour of 58 deposit money banks covering the period of 1988-1999. The results of the model estimations provide no evidence of a potential fo...
Estimating cost efficiency of Turkish commercial banks under unobserved heterogeneity with stochastic frontier models Gunes, Hakan; Yıldırım Kasap, Dilem (2016-12-01) This study aims to investigate the cost efficiency of Turkish commercial banks over the restructuring period of the Turkish banking system, which coincides with the 2008 financial global crisisand the 2010 European sovereign debt crisis. To this end,within the stochastic frontier framework, we employ true fixed effects model,where the unobserved bank heterogeneity is integrated in the inefficiency distribution at a mean level. To select the cost function with the most appropriate inefficiency correlates, we...
Financial fragilities of Turkish non-financial sectors Kılıç, Abdurrahman; Özmen, Erdal; Department of Economics (2015) This thesis investigates financial structure of Turkish non-financial sectors and the impacts of their financial fragilities on profitability using the Central Bank of the Republic of Turkey (CBRT) sector level company accounts data base. The results suggest that corporate sector leverage dramatically increased after 2009. Despite the improvements in maturity and liability dollarization of the corporate sector, fragilities still appear to be substantially high. Foreign currency denominated assets have becom...
Financial dollarization and currency substitution in Turkey 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: https://hdl.handle.net/11511/41072.