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The Bank Lending Channel of Monetary Transmission in Turkey

Author

Listed:
  • Turguttopbas, Neslihan

    (Atilim University, Management Faculty, Department of International Trade and Logistics)

Abstract

In this paper, it is aimed to fill a gap in the literature by providing empirical evidence on the influence of monetary policy of Central Bank of Turkey on bank lending in Turkish financial system. In the analysis, the bank level data consisting of 20 banks and monthly market interest rates are used for the period 2001-2017. The findings of the study address three different perspectives of transmission of monetary policy rates. Firstly, the effect of the policy rate on bank lending rates is evaluated and it is confirmed that a change in the policy rate has been reflected in banks’ lending rate with 3 months lag. The second group of findings report that the monetary policy affects banks' lending rate in Turkey mainly through its effects on the deposit rates with a lag of 2 months. The third perspective focuses on the balance sheet channel of monetary policy transmission. The results indicate that mainly the policy rate of central bank and liquidity level affect the supply of bank loans. Each of the variables of the adequacy of bank capital and ROA affects the bank’s supply of the loans. Amongst the economic variables, the GDP growth has a positive and significant and stock exchange index has negative and significant relation with the supply of bank loans.

Suggested Citation

  • Turguttopbas, Neslihan, 2019. "The Bank Lending Channel of Monetary Transmission in Turkey," Business and Economics Research Journal, Uludag University, Faculty of Economics and Administrative Sciences, vol. 10(2), pages 313-326, April.
    • Handle: RePEc:ris:buecrj:0392
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    Citations

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    Cited by:

    1. Ilyas Siklar, 2021. "Transmission of Monetary Policy through Credit Interest Rates in Turkey: A Microeconomic Perspective," Business and Economic Research, Macrothink Institute, vol. 11(4), pages 122-140, December.

    More about this item

    Keywords

    Monetary Policy; Bank Lending Channel; Balance Sheet Channel;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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