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


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Ozsuca E. A. , AKBOSTANCI ÖZKAZANÇ E.

EMERGING MARKETS FINANCE AND TRADE, cilt.52, ss.589-609, 2016 (SSCI İndekslerine Giren Dergi) identifier identifier

  • Cilt numarası: 52 Konu: 3
  • Basım Tarihi: 2016
  • Doi Numarası: 10.1080/1540496x.2015.1047300
  • Dergi Adı: EMERGING MARKETS FINANCE AND TRADE
  • Sayfa Sayıları: ss.589-609

Özet

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.