Basel capital requirements and bank behavior : evidence form Turkish banking systems
Author
Deryol, Ahmet
Advisor
Önder, Zeynep
Date
2014Publisher
Bilkent University
Language
English
Type
ThesisItem Usage Stats
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Abstract
In this study I examine the effects of Basel capital requirements on the
behavior of Turkish banks for the period between December 2002 and
December 2013. Turkish banks are found to increase their lending rates by
17.33 basis points in case of a one-percent rise in equity to asset ratio. When
the same analysis is applied to state, private and foreign banks, it is found
that state banks behave differently and decrease their lending rates when
they increase their equity to asset ratio. As a second analysis, I examine how
banks react when they are exposed to regulatory pressure to increase their
equity to asset ratio. I use simultaneous equations methodology to measure
the effects of regulatory pressure. The findings indicate that private banks do
not change their behavior, state banks increase their equity to asset ratio and
foreign banks decrease their risk level when they are exposed to regulatory
pressure.