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Financial stability and macroprudential policy in Turkey

In: Macroprudential policy frameworks, implementation and relationships with other policies

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  • Murat Uysal

    (Bank for International Settlements)

Abstract

In the aftermath of the global financial crisis, the Central Bank of the Republic of Turkey (CBRT) designed and adopted a policy mix where reserve requirements, an asymmetric interest rate corridor and a reserve options mechanism (ROM) were used alongside the policy rate to reduce the negative effects of volatility in capital flows. This deployment of instruments helped to maintain the resilience of the Turkish financial system in the wake of external shocks. Authorities in Turkey have more recently implemented a coordinated policy mix of tight monetary policy along with accommodative macroprudential and fiscal policies to maintain price, financial and macroeconomic stability.

Suggested Citation

  • Murat Uysal, 2017. "Financial stability and macroprudential policy in Turkey," BIS Papers chapters, in: Bank for International Settlements (ed.), Macroprudential policy frameworks, implementation and relationships with other policies, volume 94, pages 349-364, Bank for International Settlements.
    • Handle: RePEc:bis:bisbpc:94-27
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    References listed on IDEAS

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    1. Benjamin Born & Michael Ehrmann & Marcel Fratzscher, 2014. "Central Bank Communication on Financial Stability," Economic Journal, Royal Economic Society, vol. 124(577), pages 701-734, June.
    2. Hande Küçük & Pinar Özlü & İsmaİl Anil Talaslı & Deren Ünalmış & Canan Yüksel, 2016. "Interest Rate Corridor, Liquidity Management, And The Overnight Spread," Contemporary Economic Policy, Western Economic Association International, vol. 34(4), pages 746-761, October.
    3. Mahir Binici & Hasan Erol & A. Hakan Kara & Pinar Ozlu & Deren Unalmis, 2013. "Interest Rate Corridor : A New Macroprudential Tool?," CBT Research Notes in Economics 1320, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    4. A. Hakan Kara, 2012. "Monetary Policy in Turkey After the Global Crisis," Working Papers 1217, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    5. Oguz Arslaner & Ugur Ciplak & Hakan Kara & Doruk Kucuksarac, 2015. "Reserve Option Mechanism : Does It Work As An Automatic Stablizer?," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 15(1), pages 1-18.
    6. Samuel G. Hanson & Anil K. Kashyap & Jeremy C. Stein, 2011. "A Macroprudential Approach to Financial Regulation," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 3-28, Winter.
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    Cited by:

    1. Oguzhan Cepni & Yavuz Selim Hacihasanoglu & Muhammed Hasan Yilmaz, 2020. "Credit decomposition and economic activity in Turkey: A wavelet-based approach," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 20(3), pages 109-131.
    2. Caner Bakir & Sinan Akgunay & Kerem Coban, 2021. "Why does the combination of policy entrepreneur and institutional entrepreneur roles matter for the institutionalization of policy ideas?," Policy Sciences, Springer;Society of Policy Sciences, vol. 54(2), pages 397-422, June.

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