Dollarization, liquidity and performance: Evidence from Turkish banking

Mustafa Caglayan () and Oleksandr Talavera ()

MPRA Paper from University Library of Munich, Germany

Abstract: Using a panel of Turkish commercial banks, we examine credit dollarization and its impact on banks' liquidity and profitability. Our estimates suggest that banks partially passthrough foreign denominated funds to borrowers in the form of foreign denominated credit. Furthermore, banks which lend in foreign denominated currency hold less liquid assets and experience higher return on assets. The results suggest that, when the domestic currency is stable, banks in Turkey manage their liquidity aggressively to earn higher returns on foreign denominated funds.

Keywords: Financial Dollarization; Commercial Banks; Liquidity; Performance; Pass-through (search for similar items in EconPapers)
JEL-codes: G20 G21 (search for similar items in EconPapers)
Date: 2016-07-16
New Economics Papers: this item is included in nep-ara, nep-cse, nep-cwa and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:72812

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