External Financial Stress and External Financing Vulnerability in Turkey : Some Policy Implications for Financial Stability
AbstractExternal financial stress is one of the causes of capital outflows and reduction in borrowing ability of emerging markets. Sudden reversal of capital inflows and disruption in access to the international capital markets could be a threat for the domestic financial stability as in the case of Asian Crisis in 1997-1998. This paper analyses the behavior of external financing sources of Turkey, namely FX non-core liabilities of the banking system and portfolio flows, for periods 1995-2000 and 2004-2012. Our results show that unlike the 1995-2000 period, FX non-core liabilities of the banking system are very sensitive to the external financial stress during the 2004-2012 period. Portfolio flows decline in both cases but with a higher magnitude in the second period. Our results have important policy implications.
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Bibliographic InfoPaper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 1317.
Date of creation: 2013
Date of revision:
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Financial stability; financial flows; FX non-core liabilities; VIX; Turkish banking secto;
Other versions of this item:
- Etkin Ozen & Cem Sahin & Ibrahim Unalmis, 2013. "External Financial Stress and External Financing Vulnerability in Turkey : Some Policy Implications for Financial Stability," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 13(Special I), pages 65-74.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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