Does the Bank Lending Channel of Monetary Transmission Work in Turkey?

December 1, 2007

Preview Citation

Format: Chicago

Petya Koeva Brooks. Does the Bank Lending Channel of Monetary Transmission Work in Turkey?, (USA: International Monetary Fund, 2007) accessed November 12, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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.

Subject: Bank credit, Banking, Commercial banks, Liquidity, Loans

Keywords: Bank, Lending channel, Loan, WP

Publication Details

Pages:

11
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/272
Stock No:

WPIEA2007272
ISBN:

9781451868357
ISSN:

1018-5941

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