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Bank Lending in Turkey: Effects of Monetary and Fiscal Policies
Author:
Burcu Aydin
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and
Ms. Deniz O Igan
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https://orcid.org/0000-0002-9501-1807
Series:
IMF Working Papers
Volume/Issue:
Volume 2010: Issue 233
Language:
English
Publication Date:
01 Oct 2010
DOI:
https://doi.org/10.5089/9781455209330.001
ISBN:
9781455209330
ISSN:
1018-5941
Pages:
33
Keywords:
WP; central bank; banking sector; inflation rate; money market; Bank credit; monetary policy; fiscal policy; panel data; fiscal policy variable; credit supply; bank assets; contractionary fiscal policy; lending channel; transmission mechanism; bank ownership; Loans; Credit; Commercial banks
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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The period following the 2000-01 crisis was marked by a successful disinflation program sustained through inflation targeting and fiscal discipline in Turkey. This paper studies the impact of monetary and fiscal policies on credit growth during this period. Using quarterly bank-level data covering 2002-08, we find evidence that liquidity-constrained banks have sharper decline in lending during contractionary monetary policies and that crowding-out effect disappears more for banks with a retail-banking focus when fiscal policies are prudent.The results are statistically weak, suggesting that bank lending channel is not strong in Turkey and government finances has limited direct impact on credit.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund