Browsing by Subject "Non-performing loans"

Now showing 1 - 2 of 2

Embargo
Endogenous bank regulation and supervision: long term implications
(Elsevier Inc., 2024-01-09) Karakoyun, O. K.; Karakaplan, M. U.; Neyaptı, Bilin
The role of bank regulation and supervision (RS) on financial stability and welfare has been subject to ongoing research, especially since the Great Recession. RS is expected to help eliminate the adverse selection and moral hazard problems that are abundant in financial transactions. In this paper, we present a general equilibrium model that is augmented by either a bank regulatory and supervisory agent who chooses the level of RS by maximizing bank profits, or by a macroprudential agent who minimizes non-performing loans (NPL). We compare the long-term outcomes of these scenarios and show that minimizing NPL is feasible for a larger and economically more viable range of parameter values than the alternatives. Moreover, for a comparable set of parameter combinations, the optimal choice of RS that minimizes NPL leads to both higher levels of steady state income and lower interest spreads as compared to RS that maximizes bank profits.
Open Access
Essays on housing market and bank loans
(2022-08) Ayberk, İdil
This dissertation comprises three essays about the housing market and banks’ loan portfolios at the province level in Turkey. The first essay focuses on the supply side of the housing market. The price elasticity of housing supply is estimated using quarterly data over the period 2008-2017, and the factors that drive the differences across provinces are investigated. We find that Turkey has a low housing supply elasticity on average, but elasticity estimates exhibit variation across provinces. Our results suggest that population, geographical constraints and local regulatory conditions are significant factors in explaining the differences in housing supply elasticity estimates. In the second essay, we answer the question of whether banks change their loan allocation with the appreciation of house prices and whether state-owned banks behave like other banks with different ownership structures by using province-level data over the 2007Q4–2015Q2 period. The undevelopable land share and mortgage rate are employed as instruments for house price growth. We find that commercial loans are crowded out by mortgage, consumer, and construction loans with the increase in house prices; in addition, state-owned banks are found to reduce their commercial, and in particular agricultural loans, more than private banks as house prices appreciate. In the third essay, we examine the effect of house price appreciation on non-performing loans (NPLs) of domestic banks between 2009Q1–2016Q4, when real house prices were increasing. We document that non-performing total, commercial, and consumer loans decline as house prices increase. No difference among banks by ownership type is observed.