Bank regulation in dollarized economies: The case of Turkey

Regulators in emerging markets are increasingly curtailing the practice of foreigncurrency lending. In such a move Turkish regulatory authorities banned foreign currencylending to households in 2009. This paper examines the evolution of financial dollarization inTurkey in the 2002-2009 period by loo...

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Veröffentlicht in:	International journal of financial studies 2013-12, Vol.1 (4), p.137-153
Hauptverfasser:	Rengifo, Erick W, Ozsoz, Emre, Akinkunmi, Mustapha A, Court, Eduardo
Format:	Artikel
Sprache:	eng
Schlagworte:	Banking industry banking regulation Banks Bans Borrowing Default dollarization Emerging markets Foreign exchange Foreign exchange markets Foreign exchange rates Households Hypotheses Interest rates Lines of credit Loans Macroeconomics Market economies Regulation Regulation of financial institutions Studies Transition economies Turkish banking system Volatility
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Zusammenfassung:	Regulators in emerging markets are increasingly curtailing the practice of foreigncurrency lending. In such a move Turkish regulatory authorities banned foreign currencylending to households in 2009. This paper examines the evolution of financial dollarization inTurkey in the 2002-2009 period by looking the currency composition of loans and deposits inthe banking system and the macroeconomic developments. We find that the Turkish bankingsystem was unhedged against currency fluctuations and the regulators acted preemptively inbanning the practice.
ISSN:	2227-7072 2227-7072
DOI:	10.3390/ijfs1040137