Bank-Specific Determinants of Financial Stability in Participation Banks: Fresh Evidence from the Driscoll-Kraay Estimator

Abstract

Since its first introduction as a primary policy goal by a big central bank, financial stability has received much interest as a distinct matter, separate from price stability and the efficient functioning of the financial sectors. Accordingly, different financial analysts and scholars in the financial system have tried to unravel the complexity of financial stability and have conducted theoretical and empirical research at different levels. This study aims to reveal the internal factors affecting the financial stability of participation banks in Turkey. Therefore, we consider the data of 6 participation banks for the 2019Q1-2023Q1 period. Moreover, we assess the stability of participation banks with the Z-score. As a result of the analyses with the Driscoll &Kraay robust standard errors estimator, firstly, we found a negative relationship between risk-weighted and non-risk-weighted capital ratios and bank stability. Secondly, we concluded that while there is a negative relationship between bank stability and bank size, there is a positive relationship between cost-to-income ratio, loan ratio and collected funds ratio and bank stability. Finally, we observed a negative relationship between asset and fund diversifications and bank stability; in contrast, there is a positive relationship between income diversification and bank stability. The results of the research state that the factors affecting bank stability from most to least are income diversification, fund and asset diversifications, collected funds ratio, non-risk weighted capital ratio, cost-to-income ratio, loan ratio, risk-weighted capital ratio and bank size, respectively. The research results also indicate that participation banks must improve their management efficiency, credit, collected fund and income diversification levels to support their sustainable financial stability and soundness.

Keywords

• Financial Stability
• Participation Banks
• Bank-Specific Indicators
• Driscoll-Kraay Estimator

Katılım Bankalarında Finansal İstikrarın Bankaya Özgü Belirleyicileri: Driscoll-Kraay Tahmincisinden Yeni Kanıtlar

Öz

Finansal istikrar, büyük bir merkez bankası tarafından birincil politika hedefi olarak ilk kez ortaya atıldığından bu yana, fiyat istikrarından ve finansal sektörlerin etkin işleyişinden ayrı bir konu olarak büyük ilgi görmüştür. Bu doğrultuda, finansal sistemdeki farklı finansal analistler ve akademisyenler finansal istikrarın karmaşıklığını çözmeye çalışmış ve farklı düzeylerde teorik ve ampirik araştırmalar yürütmüşlerdir. Bu çalışma, Türkiye'deki katılım bankalarının finansal istikrarını etkileyen içsel faktörleri ortaya koymayı amaçlamaktadır. Bu nedenle 2019Q1-2023Q1 dönemi için 6 katılım bankasının verilerini dikkate alınmıştır. Ayrıca, katılım bankalarının istikrarı Z-skor ile değerlendirilmiştir. Driscoll & Kraay dirençli standart hatalar tahmincisi ile yapılan analizler sonucunda, ilk olarak, risk ağırlıklı ve risk ağırlıklı olmayan sermaye oranları ile banka istikrarı arasında negatif bir ilişki bulunmuştur. İkinci olarak, banka istikrarı ile banka büyüklüğü arasında negatif bir ilişki varken, maliyet-gelir oranı, kredi oranı ve toplanan fonlar oranı ile banka istikrarı arasında pozitif bir ilişki olduğu sonucuna varılmıştır. Son olarak, varlık ve fon çeşitlendirmeleri ile banka istikrarı arasında negatif bir ilişki varken, gelir çeşitlendirmesi ile banka istikrarı arasında pozitif bir ilişkinin olduğu gözlemlenmiştir. Araştırma sonuçları, banka istikrarını en çoktan en aza doğru etkileyen faktörlerin sırasıyla gelir çeşitlendirmesi, fon ve varlık çeşitlendirmeleri, toplanan fonlar oranı, risk ağırlıklı olmayan sermaye oranı, maliyet-gelir oranı, kredi oranı, risk ağırlıklı sermaye oranı ve banka büyüklüğü olduğunu belirtmektedir. Araştırma sonuçları ayrıca, katılım bankalarının sürdürülebilir finansal istikrar ve sağlamlığını desteklemek için yönetim etkinliğini, kredi, toplanan fon ve gelir çeşitlendirme düzeylerini geliştirmeleri gerektiğini göstermektedir.

Anahtar Kelimeler

• Finansal İstikrar
• Katılım Bankaları
• Bankaya Özgü Göstergeler
• Driscoll-Kraay Tahmincisi

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