Master Thesis Defense: Tanju Çapacıoğlu

The Determinants and Dynamics off Cross Border Bank Loans in Turkey

Tanju Çapacıoğlu
Ekonomi, M.Sc. Thesis, 2015

Thesis Jury
Selçuk Özyurt (Thesis Advisor), Abdurrahman Aydemir, Murat Kırdar, Sadettin Haluk(Substitute Jury)

Date &Time: June,08th, 2015 – 15:00

Place: FASS 2054

Abstract

In this study, the dynamics of cross border loans of banks operating in Turkey are determined. The used data set consists of the all banks' loan details between December 2002 and December 2014. Firstly, the determinants of cross border bank loans are revealed within the frame of bank-specific, national and global liquidity indicators. According to results, large banks and banks, which have high return on asset ratio, more credit in their portfolio and low deposit ratio, are borrowing more. It is also found that there is no significant impact of Npl ratio and capital structure of banks on cross border bank loans. Secondly, it is important the lender banks' characteristics in terms of fragility and affiliated loans have less fragile structure as regards non-affiliated loans. Thirdly, the impacts of global liquidity indicators on cross border bank loans are diminished and the new policy framework in Turkey has been successful within the frame of protecting Turkish economy from the sharp volatile bank flows. The results show that after the implementation of macro-prudential policies, the cross-border bank flows to Turkey have been less sensitive to global factors. Lastly, the effects of Fed's balance sheet size, which changed substantially as a result of quantitative easing program, on cross border bank loans in Turkey are analyzed. The quantitative easing programs increased cross border bank loans. Credit, repo, deposits, syndication and securitization types are more affected from the increase in the Fed's balance sheet size, respectively. Moreover, banks, which have relatively small asset size, weak capital structure, low return on assets and liquid assets ratios are more positively affected from the changes in the Fed's balance sheet size because they could not borrow at the desired level in the illiquid period but they started to borrow more easily with the help of Fed's quantitative easing process.