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The Effects of IMF Financial Soundness Indicators of Turkish Commercial Banks on the Financial Development Index

Year 2024, Volume: 9 Issue: 1, 105 - 124, 30.06.2024
https://doi.org/10.30927/ijpf.1428422

Abstract

The financial soundness of banks, which are the building blocks of the financial system, is an important indicator that reflects the effectiveness of the financial system. It can be stated that the financial development of countries with an effective financial system will be positively affected by this situation. The paper aims to evaluate the effects of IMF financial soundness indicators of the Turkish commercial banks which have an important share in the Turkish banks, on the financial development index of Türkiye. In this paper, an evaluation was made based on the IMF Financial development index and IMF financial soundness indicators. Panel data analysis was used and panel least squares model estimation was made within the analysis. In line with the findings, it has been determined that sensitivity to profitability, liquidity, and market risks of commercial banks negatively affect financial development while the capital adequacy and asset quality of commercial banks positively affect financial development.

References

  • Almayatah, S. A. A. (2018). ‘’The Impact of Islamic Banks on Financial Soundness Indicators’’. International Review of Management and Marketing, 8(3), 26-31.
  • Arzova, S. B., & Şahin, B. Ş. (2023). Bankaların Finansal Karlılık Oranlarıyla Finansal Sağlamlık Göstergeleri İlişkisi: Türkiye’de Granger Nedensellik Analizi. Maliye ve Finans Yazıları, (119), 61-76.
  • Banyen, K., & Biekpe, N. (2021). ‘’Financial Integration and Bank Profitability in Five Regional Economic Communities in Africa’’. International Journal of Emerging Markets, 16(3), 468-491. https://doi.org/10.1108/IJOEM-08-2018-0435.
  • Bölükoğlu, A. (2021). ‘’Finansal Gelişme ve Ekonomik Büyüme Arasındaki Doğrusal Olmayan İlişki: IMF Finansal Gelişmişlik Endeksi İle Yeni Bulgular’’. Ekonomi Politika ve Finans Araştırmaları Dergisi, 6(2), 385-402. https://doi.org/10.30784/epfad.962307.
  • Che, M. N. X., & Shinagawa, Y. (2014). Financial Soundness Indicators and the Characteristics of Financial Cycles. International Monetary Fund.
  • Dabla-Norris, E., Kersting, E. K., & Verdier, G. (2012). ‘’Firm Productivity, Innovation, And Financial Development’’. Southern Economic Journal, 79(2), 422-449. https://doi.org/10.4284/0038-4038-2011.201.
  • Demirgüç-Kunt, A., & Huizinga, H. (2001). ‘’Financial Structure and Economic Growth: Financial Structure and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development’’. İçinde Demirgüç Kunt, A. & Levine, R. (Ed.), Financial Structure and Bank Profitability (243-261). London: The MIT Press.
  • Fafchamps, M., & Schündeln, M. (2013). ‘’Local Financial Development and Firm Performance: Evidence from Morocco’’. Journal of Development Economics, 103, 15-28. https://doi.org/10.1016/j.jdeveco.2013.01.010.
  • Gujarati, D. (2016). Örneklerle Ekonometri. Bolatoğlu N. (Çev.). Ankara: BB101 Yayınları.
  • Hadri, K. (2000). ‘’Testing for Stationarity in Heterogeneous Panel Data’’. The Econometrics Journal, 3(2), 148-161. https://doi.org/10.1111/1368-423X.00043.
  • Khan, H. H. (2022). ‘’Bank Competition, Financial Development and Macroeconomic Stability: Empirical Evidence from Emerging Economies’’. Economic Systems, 46(4), 101022. https://doi.org/10.1016/j.ecosys.2022.101022.
  • Koçak, E., & Uçan, O. (2023). ‘’Kripto Para Ticaretinin Çevre Kirliliği Üzerine Etkileri: Panel Veri Analizi’’. Journal of Politics Economy and Management, 6(2), 95-107.
  • Le, T. D., & Ngo, T. (2020). ‘’The Determinants of Bank Profitability: A Cross-country Analysis’’. Central Bank Review, 20(2), 65-73. https://doi.org/10.1016/j.cbrev.2020.04.001.
  • Ozili, P. K., & Ndah, H. (2021). ‘’Impact of Financial Development on Bank Profitability’’. Journal of Economic and Administrative Sciences. https://www.emerald.com/insight/content/doi/10.1108/JEAS-07-2021-0140/full/html
  • Pesaran, M. H. (2004). ‘’General Diagnostic Tests for Cross-Section Dependence in Panels’’. (IZA Discussion Paper No. 1240). Institute for the Study of Labor (IZA), 1240, 1-39.
  • Pesaran, M. H. (2007). ‘’A Simple Panel Unit Root Test in the Presence of Cross‐Section Dependence’’. Journal of Applied Econometrics, 22(2), 265-312. https://doi.org/10.1002/jae.951.
  • Topçu, M., & Öztekin, B. S. (2021). ‘’Finansal Gelişme ile Firma Performansı Arasındaki İlişki: Borsa İstanbul’da Sektörel Bir Uygulama’’. Maliye ve Finans Yazıları, 116, 37-56. https://doi.org/10.33203/mfy.925683
  • Turgut, A., & Ertay, H. İ. (2016). Bankacılık sektörünün ekonomik büyüme üzerindeki etkisi: Türkiye üzerine nedensellik analizi.
  • Turgut, E., & Uçan, O. (2019). ‘’Yolsuzluğun Vergi Oranları Ile Olan Ilişkisinin Oecd Ülkeleri Örnekleminde Incelenmesi’’. Niğde Ömer Halisdemir Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 1(3), 1-17.
  • Ulusoy, A., Demirel, D. Ü. S. & Özbilge, G. (2023). ‘’Türkiye’de Bankacılık Sektörü Performansının Finansal Gelişmişlik Üzerine Etkileri’’. İnsan ve Toplum Bilimleri Araştırmaları Dergisi, 12(3), 1685-1709 . https://doi.org/10.15869/itobiad.1302255
  • Varlık, N., & Varlık, S. (2016). Risk Algısının Türkiye’de Bankacılık Sektörüne Etkileri: Bankacılık Sağlamlık Endeksi İle Bir Değerlendirme (The Effects of Risk Perception on Banking Sector in Turkey: An Assessment with Banking System Soundness Index). Yönetim ve Ekonomi Dergisi, 23(2), 545-563. https://doi.org/10.18657/yecbu.20029
  • International Monetary Fund, (2023). Financial Soundness Indicators, Data and Metadata Tables, Country Tables. https://data.imf.org/regular.aspx?key=63174545 (Erişim: 11.01.2024).
  • International Monetary Fund (2019). Financial Soundness Indicators Compilation Guide, https://data.imf.org/?sk=51b096fa-2cd2-40c2-8d09-0699cc1764da, (Erişim: 22.01.2024).
  • International Monetary Fund, (2023). https://data.imf.org/?sk=f8032e80-b36c-43b1-ac26-493c5b1cd33b , (Erişim: 22.01.2024).
  • Türkiye Bankalar Birliği, Seçilmiş Rasyolar, (2021). https://www.tbb.org.tr/tr/banka-ve-sektor-bilgileri/istatistiki-raporlar/--2021---secilmis-rasyolar/6102 (Erişim: 11.01.2024)
  • Türkiye Bankalar Birliği, İstatistiki Raporlar, 2021. https://www.tbb.org.tr/tr/banka-ve-sektor-bilgileri/istatistiki-raporlar/Aktif_Buyukluklerine_Gore_Banka_Siralamasi/6057 (Erişim: 10.01.2024).

The Effects of IMF Financial Soundness Indicators of Turkish Commercial Banks on the Financial Development Index

Year 2024, Volume: 9 Issue: 1, 105 - 124, 30.06.2024
https://doi.org/10.30927/ijpf.1428422

Abstract

The financial soundness of banks, which are the building blocks of the financial system, is an important indicator that reflects the effectiveness of the financial system. It can be stated that the financial development of countries with an effective financial system will be positively affected by this situation. The paper aims to evaluate the effects of IMF financial soundness indicators of the Turkish commercial banks which have an important share in the Turkish banks, on the financial development index of Türkiye. In this paper, an evaluation was made based on the IMF Financial development index and IMF financial soundness indicators. Panel data analysis was used and panel least squares model estimation was made within the analysis. In line with the findings, it has been determined that sensitivity to profitability, liquidity, and market risks of commercial banks negatively affect financial development while the capital adequacy and asset quality of commercial banks positively affect financial development.

References

  • Almayatah, S. A. A. (2018). ‘’The Impact of Islamic Banks on Financial Soundness Indicators’’. International Review of Management and Marketing, 8(3), 26-31.
  • Arzova, S. B., & Şahin, B. Ş. (2023). Bankaların Finansal Karlılık Oranlarıyla Finansal Sağlamlık Göstergeleri İlişkisi: Türkiye’de Granger Nedensellik Analizi. Maliye ve Finans Yazıları, (119), 61-76.
  • Banyen, K., & Biekpe, N. (2021). ‘’Financial Integration and Bank Profitability in Five Regional Economic Communities in Africa’’. International Journal of Emerging Markets, 16(3), 468-491. https://doi.org/10.1108/IJOEM-08-2018-0435.
  • Bölükoğlu, A. (2021). ‘’Finansal Gelişme ve Ekonomik Büyüme Arasındaki Doğrusal Olmayan İlişki: IMF Finansal Gelişmişlik Endeksi İle Yeni Bulgular’’. Ekonomi Politika ve Finans Araştırmaları Dergisi, 6(2), 385-402. https://doi.org/10.30784/epfad.962307.
  • Che, M. N. X., & Shinagawa, Y. (2014). Financial Soundness Indicators and the Characteristics of Financial Cycles. International Monetary Fund.
  • Dabla-Norris, E., Kersting, E. K., & Verdier, G. (2012). ‘’Firm Productivity, Innovation, And Financial Development’’. Southern Economic Journal, 79(2), 422-449. https://doi.org/10.4284/0038-4038-2011.201.
  • Demirgüç-Kunt, A., & Huizinga, H. (2001). ‘’Financial Structure and Economic Growth: Financial Structure and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development’’. İçinde Demirgüç Kunt, A. & Levine, R. (Ed.), Financial Structure and Bank Profitability (243-261). London: The MIT Press.
  • Fafchamps, M., & Schündeln, M. (2013). ‘’Local Financial Development and Firm Performance: Evidence from Morocco’’. Journal of Development Economics, 103, 15-28. https://doi.org/10.1016/j.jdeveco.2013.01.010.
  • Gujarati, D. (2016). Örneklerle Ekonometri. Bolatoğlu N. (Çev.). Ankara: BB101 Yayınları.
  • Hadri, K. (2000). ‘’Testing for Stationarity in Heterogeneous Panel Data’’. The Econometrics Journal, 3(2), 148-161. https://doi.org/10.1111/1368-423X.00043.
  • Khan, H. H. (2022). ‘’Bank Competition, Financial Development and Macroeconomic Stability: Empirical Evidence from Emerging Economies’’. Economic Systems, 46(4), 101022. https://doi.org/10.1016/j.ecosys.2022.101022.
  • Koçak, E., & Uçan, O. (2023). ‘’Kripto Para Ticaretinin Çevre Kirliliği Üzerine Etkileri: Panel Veri Analizi’’. Journal of Politics Economy and Management, 6(2), 95-107.
  • Le, T. D., & Ngo, T. (2020). ‘’The Determinants of Bank Profitability: A Cross-country Analysis’’. Central Bank Review, 20(2), 65-73. https://doi.org/10.1016/j.cbrev.2020.04.001.
  • Ozili, P. K., & Ndah, H. (2021). ‘’Impact of Financial Development on Bank Profitability’’. Journal of Economic and Administrative Sciences. https://www.emerald.com/insight/content/doi/10.1108/JEAS-07-2021-0140/full/html
  • Pesaran, M. H. (2004). ‘’General Diagnostic Tests for Cross-Section Dependence in Panels’’. (IZA Discussion Paper No. 1240). Institute for the Study of Labor (IZA), 1240, 1-39.
  • Pesaran, M. H. (2007). ‘’A Simple Panel Unit Root Test in the Presence of Cross‐Section Dependence’’. Journal of Applied Econometrics, 22(2), 265-312. https://doi.org/10.1002/jae.951.
  • Topçu, M., & Öztekin, B. S. (2021). ‘’Finansal Gelişme ile Firma Performansı Arasındaki İlişki: Borsa İstanbul’da Sektörel Bir Uygulama’’. Maliye ve Finans Yazıları, 116, 37-56. https://doi.org/10.33203/mfy.925683
  • Turgut, A., & Ertay, H. İ. (2016). Bankacılık sektörünün ekonomik büyüme üzerindeki etkisi: Türkiye üzerine nedensellik analizi.
  • Turgut, E., & Uçan, O. (2019). ‘’Yolsuzluğun Vergi Oranları Ile Olan Ilişkisinin Oecd Ülkeleri Örnekleminde Incelenmesi’’. Niğde Ömer Halisdemir Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 1(3), 1-17.
  • Ulusoy, A., Demirel, D. Ü. S. & Özbilge, G. (2023). ‘’Türkiye’de Bankacılık Sektörü Performansının Finansal Gelişmişlik Üzerine Etkileri’’. İnsan ve Toplum Bilimleri Araştırmaları Dergisi, 12(3), 1685-1709 . https://doi.org/10.15869/itobiad.1302255
  • Varlık, N., & Varlık, S. (2016). Risk Algısının Türkiye’de Bankacılık Sektörüne Etkileri: Bankacılık Sağlamlık Endeksi İle Bir Değerlendirme (The Effects of Risk Perception on Banking Sector in Turkey: An Assessment with Banking System Soundness Index). Yönetim ve Ekonomi Dergisi, 23(2), 545-563. https://doi.org/10.18657/yecbu.20029
  • International Monetary Fund, (2023). Financial Soundness Indicators, Data and Metadata Tables, Country Tables. https://data.imf.org/regular.aspx?key=63174545 (Erişim: 11.01.2024).
  • International Monetary Fund (2019). Financial Soundness Indicators Compilation Guide, https://data.imf.org/?sk=51b096fa-2cd2-40c2-8d09-0699cc1764da, (Erişim: 22.01.2024).
  • International Monetary Fund, (2023). https://data.imf.org/?sk=f8032e80-b36c-43b1-ac26-493c5b1cd33b , (Erişim: 22.01.2024).
  • Türkiye Bankalar Birliği, Seçilmiş Rasyolar, (2021). https://www.tbb.org.tr/tr/banka-ve-sektor-bilgileri/istatistiki-raporlar/--2021---secilmis-rasyolar/6102 (Erişim: 11.01.2024)
  • Türkiye Bankalar Birliği, İstatistiki Raporlar, 2021. https://www.tbb.org.tr/tr/banka-ve-sektor-bilgileri/istatistiki-raporlar/Aktif_Buyukluklerine_Gore_Banka_Siralamasi/6057 (Erişim: 10.01.2024).
There are 26 citations in total.

Details

Primary Language English
Subjects Macroeconomics (Other)
Journal Section Research Article
Authors

Kübra Saka Ilgın 0000-0001-5797-9617

Publication Date June 30, 2024
Submission Date January 30, 2024
Acceptance Date May 1, 2024
Published in Issue Year 2024 Volume: 9 Issue: 1

Cite

APA Saka Ilgın, K. (2024). The Effects of IMF Financial Soundness Indicators of Turkish Commercial Banks on the Financial Development Index. International Journal of Public Finance, 9(1), 105-124. https://doi.org/10.30927/ijpf.1428422

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