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Does the Bank Lending Channel of Monetary Transmission Work in Turkey?
Author:
Ms. Petya Koeva Brooks
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Series:
IMF Working Papers
Volume/Issue:
Volume 2007: Issue 272
Language:
English
Publication Date:
01 Dec 2007
DOI:
https://doi.org/10.5089/9781451868357.001
ISBN:
9781451868357
ISSN:
1018-5941
Pages:
11
Keywords:
WP; bank; loan; lending channel
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund