Identifying the Determinants of Interest Rate Risk of the Banks

Serhat Yuksel and Sinemis Zengin
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Serhat Yuksel: nternational Trade and Management, Konya Food Agriculture University
Sinemis Zengin: Ph.D. in Banking

International Journal of Research in Business and Social Science (2147-4478), 2016, vol. 5, issue 6, 12-28

Abstract: In this study, we aimed to explain the influencing factors of interest rate risk in Turkish banking sector. Within this scope, 20 deposit banks in Turkey were evaluated. Furthermore, annual data for the periods between 2006 and 2015 was analyzed by using panel logit method. According to the results of this analysis, it was identified that 2 explanatory variables affect interest rate risk of Turkish banks. First of all, it was determined that banks, which have higher amount of deposits, are exposed to higher amount of interest rate risk. In addition to this situation, it was also defined that there is a negative relationship between the amount of capital and interest rate risk. As a result of this issue, it was recommended that Turkish banks should increase capital amount in order to manage interest rate risk more effectively. Key Words: Banking, Interest Rate, Turkey, Risk Management

Date: 2016
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