Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/166736
Authors: 
Alper, Koray
Binici, Mahir
Demiralp, Selva
Kara, Hakan
Özlü, Pınar
Year of Publication: 
2016
Series/Report no.: 
Koç University-TÜSİAD Economic Research Forum Working Paper Series 1612
Abstract: 
Although reserve requirements have been used in emerging markets to smooth credit cycles, the exact transmission mechanism remains to be explored. Using bank level data, this study looks inside the black-box to unveil the interaction of reserve requirement policy with bank lending. We identify a new channel that works through a decline in bank liquidity and loan supply due to an increase in reserve requirements. We show that "quantitative tightening" through reserve requirements affect the funding needs and the liquidity position of the banking system. The consequent changes in bank liquidity have a significant impact on the bank lending behavior.
Subjects: 
monetary transmission mechanism
liquidity channel
reserve requirements
Turkey
JEL: 
E44
E51
E52
Document Type: 
Working Paper

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