Banking Crises and Early Warning Systems: A Model Suggestion for Turkish Banking Sector
AbstractThis study aims to evolve a model used in foreseeing possible banking crises in Turkey. In the light of many empirical studies’ findings, a specific model for Turkey is developed. This model is estimated by using multivariate adaptive regression splines (MARS) which is a non-linear and non-parametric estimation method. Estimation results show that significance and explanation levels of model are strongly high. According to model’s findings, banking crises can be predominantly attributed to external factors. Systemic financial crises, exchange rate open position, and terms of trade are observed to be main determinants. Besides these factors, the study shows that capital adequacy, interest rate risk, and market risk are the other important factors.
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Bibliographic InfoArticle provided by Banking Regulation and Supervision Agency in its journal Journal of Banking and Financial Markets.
Volume (Year): 4 (2010)
Issue (Month): 1 ()
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More information through EDIRC
Banking Crises; Early Warning Models and Systems; MARS Models;
Find related papers by JEL classification:
- G01 - Financial Economics - - General - - - Financial Crises
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
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