The Bank Lending Channel of Monetary Transmission; Does it Work in Turkey?

Does the bank lending channel of monetary transmission work in Turkey? Using the May- June 2006 financial turbulence as an exogenous shock that prompted a significant tightening of monetary policy, this paper examines the loan supply response of Turkey's banks, depending on their balance sheet characteristics. The empirical results indicate that banks can play a role in Turkey's monetary transmission mechanism. Specifically, bank liquidity is found to have a significant effect on loan supply in Turkey. This suggests that the effect of monetary policy in Turkey can be propagated by the banking sector, depending on its liquidity position.

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Year of publication:	2007-12-01
Authors:	Brooks, Petya Koeva
Institutions:	International Monetary Fund (IMF)
Subject:	Liquidity \| Interest rates on loans \| bank lending \| monetary policy \| monetary transmission \| central bank \| banking \| banking sector \| bank credit \| inflation \| bank loans \| transmission of monetary policy \| bank size \| bank assets \| monetary transmission mechanism \| bank capital \| bank loan \| monetary fund \| restrictive monetary policy \| government securities \| liquidity ratio \| monetary shocks \| national bank \| bank balance sheets \| transition economy \| capital requirement \| inflation-targeting \| bank finance \| banking system \| monetary conditions \| small bank \| bank data \| bank liquidity \| banks ? balance sheets \| bank risks \| banks ? loan \| aggregate demand \| banking stability \| recapitalization \| capital base

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Extent:	application/pdf
Series:	IMF Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series IMF Working Papers Number 07/272 1 pages long
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005248226