Publication:
Bank lending channel under high policy rate volatility: evidence from Turkiye
| DC Field | Value | |
|---|---|---|
| dc.contributor.author | Ufuk Can | |
| dc.contributor.author | Emrah Ismail Cevik | |
| dc.contributor.author | Turalay Kenc | |
| dc.date.accessioned | 2025-12-23T02:47:37Z | |
| dc.date.available | 2025-12-23T02:47:37Z | |
| dc.date.issued | 2025 | |
| dc.description.abstract | This paper investigates the transmission mechanisms of high policy rate volatility episodes in Turkiye, characterized by sharp and unpredictable interest rate fluctuations. Focusing on the bank lending channel, we employ a time-varying parameter structural vector autoregression with stochastic volatility model to analyze the evolving impact of monetary policy on bank lending. Our analysis examines several key aspects: the relative effectiveness of a single, large policy rate change compared to a series of gradual adjustments; the potential non-linearity of transmission, investigating whether tight or lax monetary policy exhibits greater effectiveness; and the differential responses of rate-based conventional banks and profit-loss-sharing Islamic banks to monetary policy shocks. The key findings indicate that the effectiveness of the bank lending channel varies with the nature and magnitude of monetary policy shocks. Notably, episodes of substantial monetary tightening, especially when coupled with significant exchange rate depreciation, exert a more pronounced dampening effect on lending activity. Furthermore, Islamic banks are more sensitive to policy shocks, largely because of their distinct reliance on profit-sharing arrangements and liquidity-dependent funding models. | en_US |
| dc.identifier.citation | Can, U., Kenc, T., & Cevik, E. I. (2025). Bank lending channel under high policy rate volatility: Evidence from Turkiye. The Quarterly Review of Economics and Finance, Article 102058. https://doi.org/10.1016/j.qref.2025.102058 | en_US |
| dc.identifier.doi | https://doi.org/10.1016/j.qref.2025.102058 | |
| dc.identifier.issn | 1062-9769 | |
| dc.identifier.uri | https://ikr.inceif.edu.my/handle/INCEIF/4258 | |
| dc.language | English | |
| dc.language.iso | eng | en_US |
| dc.publisher | Elsevier Inc. | en_US |
| dc.rights | �2025. Board of Trustees of the University of Illinois | |
| dc.source | SEDONA | |
| dc.subject | Bank lending channel | en_US |
| dc.subject | Dual banking system | en_US |
| dc.subject | High policy rate volatility | en_US |
| dc.subject | Turkish monetary policy | en_US |
| dc.title | Bank lending channel under high policy rate volatility: evidence from Turkiye | en_US |
| dspace.entity.type | Publication | |
| ikr.doctype | Scholarly Works | |
| ikr.topic.maintopic | Conventional finance | en_US |
| relation.isAuthorOfPublication | 7bdf745e-8829-456f-9e4f-fcc43b78d818 | |
| relation.isAuthorOfPublication.latestForDiscovery | 7bdf745e-8829-456f-9e4f-fcc43b78d818 | |
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