Empirical Analysis of Turkish Banking Sector Institutional and Macroeconomic Determinants of Risks

Hikmet Akyol () and Selim Basar
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Hikmet Akyol: Gumushane University, Siran Mustafa Beyaz Vocational School, Gumushane, Turkiye
Selim Basar: Eskisehir Anadolu University, Faculty of Economics, Eskisehir, Turkiye

Istanbul Journal of Economics-Istanbul Iktisat Dergisi, 2024, vol. 73, issue 74-1, 59-98

Abstract: This research examines the macroeconomic and institutional sources of individual, systemic, and systematic risks in the Turkish banking sector. The period between 2008:Q3 and 2019:Q3 of the nine deposit banks selected for this purpose were estimated using panel data analysis estimators. The results indicate that selected macroeconomic and institutional variables affect banking risks. These findings are important for revealing the institutional and macroeconomic sources of risks in the Turkish banking sector. Therefore, the results contain significant propositions for researchers, market participants, and politicians. Market participants and researchers can anticipate defaults and financial instability using selected macroeconomic and institutional variables. The estimation results reveal Turkish banks’ institutional soundness and financial performance strength. In addition, the extent to which banks are effective intermediaries in the sector was analysed. This research documented a strong link between global market indicators and banking risks.

Keywords: Individual risk; Systematic risk; Systemic risk; MacroFinance JEL Classification: E44; G20; G21 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ist:journl:v:73:y:2024:i:1:p:59-98

DOI: 10.26650/ISTJECON2023-1288872

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