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Bank Lending In Turkey: Effects Of Monetary And Fiscal Policies

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Executive Summary

This paper analyzes the impact of monetary and fiscal policies on Turkish banks' lending activities in the post-crisis period. In particular, the authors show that changes in monetary policy have affected credit growth through their impact on the cost of external funds and liquidity constraints. In addition, following the shift in government policies, banks have adapted to a new economic environment by moving the weight in their operations from money market trades to retail banking activities and extending more credit to the private sector.

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