Vol. 10 No. 3 (2022): Business & Management Studies: An International Journal
Articles

Revisiting the bank lending channel in Turkey under the unconventional monetary policy framework

Ekin Ayşe ÖZŞUCA
Assoc. Prof. Dr., Çankaya University, Ankara, Turkey
Bio

Published 2022-09-25

Keywords

  • Bank Lending, Credit Channel, Monetary Policy, Transmission Mechanisms, Turkey
  • Banka Kredileri, Kredi Kanalı, Para Politikası, Aktarım Mekanizmaları, Türkiye

How to Cite

ÖZŞUCA, E. A. (2022). Revisiting the bank lending channel in Turkey under the unconventional monetary policy framework. Business &Amp; Management Studies: An International Journal, 10(3), 1011–1021. https://doi.org/10.15295/bmij.v10i3.2099

Abstract

This paper provides empirical evidence regarding the bank lending channel under Turkey's unconventional monetary policy framework. Towards this end, the impact of changes in monetary policy stance on bank credit growth is investigated using a dynamic panel data modelling approach between 2011 and 2019. The empirical results reveal cross-sectional heterogeneity in the loan supply of Turkish banks following a change in monetary policy, which implies an operative bank lending channel in the post-2010 period of the policy mix. Small, liquidity-constrained, and inadequately capitalized banks tend to experience sharper contractions in their lending during monetary policy tightening episodes. Besides, in terms of bank-specific characteristics, the findings demonstrate that larger bank size and capital is associated with a higher loan supply. On the contrary, liquidity is found to harm bank lending.

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