We study the transmission of global financial uncertainty to an emerging market economy, Turkey, using data on the universe of corporate loan transactions over 2003-2013. International arbitrage implies that a decline in global uncertainty reduces country risk, which narrows the deviation from...

We investigate the effect of sovereign risk on credit supply, using August 1999 Earthquake as an exogenous shock leading to an increase in Turkey's default risk. Using data on universe of banks between 1997-2012, we show that, banks with higher ex-ante exposures to government bonds suffered a...