Abstract
This paper investigates the effects of sudden stops and international reserves on bank lending in a bank-based emerging market economy, Turkey. It includes a panel of deposit banks in Turkey over the period 2003-2013. Using a system GMM estimation technique, we find that sudden stop of capital inflows has led to deterioration in bank lending. Moreover, the results reveal that over the sudden stop periods higher international reserves held by the Central Bank have served as a buffer and prevented decline in bank lending. Another striking feature of the findings is that higher liquidity and higher deposit ratio have encouraged bank lending over the sudden stop periods whereas higher capitalization ratio placed a reverse impact on bank lending. Overall, we expect that the results provide important implications for similar emerging market economies which have fragile economic structures.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Hacettepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
