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

Author

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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)

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.

Suggested Citation

  • Hikmet Akyol & Selim Basar, 2024. "Empirical Analysis of Turkish Banking Sector Institutional and Macroeconomic Determinants of Risks," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 73(74-1), pages 59-98, June.
    • Handle: RePEc:ist:journl:v:73:y:2024:i:1:p:59-98
    DOI: 10.26650/ISTJECON2023-1288872
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    Keywords

    Individual risk; Systematic risk; Systemic risk; MacroFinance JEL Classification: E44 ; G20 ; G21;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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