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Financial Crisis, Macroprudential Policies And Depositor Discipline

Author

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  • AHMET FARUK AYSAN

    (Central Bank of the Republic of Turkey, Anafartalar Mah. İstiklal Cad. No)

  • MUSTAFA DISLI

    (#x2020;Ghent University, St. Pietersnieuwstraat 33, 9000 Gent, Belgium)

  • HUSEYIN OZTURK

    (Central Bank of the Republic of Turkey, Anafartalar Mah. İstiklal Cad. No)

Abstract

This paper examines to what extent macroprudential policies in the Turkish banking sector affected the functioning of depositor discipline. Our results suggest that depositors’ responses for poor bank performance get stronger after the 2008 crisis, when various macroprudential measures were implemented to preserve financial stability. In the aftermath of the crisis, bank behavior toward depositors also alters. Ahead of the crisis, banks did not significantly respond to the discipline exerted by depositors, however, banks begin offering higher rates to curb deposit withdrawals afterwards. Our findings suggest that the implementation of macroprudential tools seem to have a positive impact on financial stability, since, in the post-2008 period, regulatory supervision have been more firmly assisted by the market.

Suggested Citation

  • Ahmet Faruk Aysan & Mustafa Disli & Huseyin Ozturk, 2017. "Financial Crisis, Macroprudential Policies And Depositor Discipline," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(01), pages 5-25, March.
    • Handle: RePEc:wsi:serxxx:v:62:y:2017:i:01:n:s021759081740001x
    DOI: 10.1142/S021759081740001X
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    Cited by:

    1. Apergis, Nicholas & Aysan, Ahmet F. & Bakkar, Yassine, 2022. "Borrower- and lender-based macroprudential policies: What works best against bank systemic risk?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    2. repec:idn:jimfjn:v:4:y:2018:i:1b:p:1-16 is not listed on IDEAS
    3. Ali, Mirzaei & Iness, Aguir, 2020. "Capital inflows and bank stability around the financial crisis: The mitigating role of macro-prudential policies," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 69(C).
    4. G. Gospodarchuk G. & Г. Господарчук Г., 2019. "Резервный буфер капитала как инструмент макропруденциальной политики // Reserve Capital buffer as an Instrument of Macroprudential Policy," Финансы: теория и практика/Finance: Theory and Practice // Finance: Theory and Practice, ФГОБУВО Финансовый университет при Правительстве Российской Федерации // Financial University under The Government of Russian Federation, vol. 23(4), pages 43-56.
    5. Muhamed Zulkhibri, 2019. "Macroprudential policy and tools in a dual banking system: Insights from the literature," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 19(1), pages 65-76, March.

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