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Cross-border Transactions and Network Analysis: Evidence from Turkey

Author

Listed:
  • Tuba Pelin Sumer
  • Suheyla Ozyildirim

Abstract

Funding from foreign banks in repo, deposit and loan type is an important financing channel for Turkish banks. For hedging currency risk, Turkish banks are also making derivative transactions with foreign counterparties. In this paper, we study on-balance and off-balance sheet relations between Turkish banks and foreign-domiciled banks for 2014-2018 period using network analysis techniques. We group banks according to their business models (islamic vs conventional) and ownership structure (related vs unrelated) and document the evolution of cross-border relationships. We find that islamic domestic banks prefer islamic counterparties in on-balance sheet transactions, however they also work with the conventional banks in the derivative transactions. Additionally, we show that the share of funding from foreign domiciled banks is higher for the domestic subsidiaries of foreign banks. Finally, we find that the currency movement in 2018 seems to change some of the cross-border relations.Creation-Date: 2021

Suggested Citation

  • Tuba Pelin Sumer & Suheyla Ozyildirim, "undated". "Cross-border Transactions and Network Analysis: Evidence from Turkey," Working Papers 2122, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    • Handle: RePEc:tcb:wpaper:2122
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    File URL: https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Publications/Research/Working+Paperss/2021/21-22
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    More about this item

    Keywords

    Cross-border bank lending; Network analysis; Financial interconnectedness;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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