Does the Bank Lending Channel of Monetary Transmission Work in Turkey?
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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.
Series:
Working Paper No. 2007/272
Subject:
English
Publication Date:
December 1, 2007
ISBN/ISSN:
9781451868357/1018-5941
Stock No:
WPIEA2007272
Pages:
11
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