Abstract
The studies after 2008 financial crisis emphasized that the concept of leverage procyclicality is among the major reasons of this crisis. BASEL II utilized during this crisis period has failed to foresee the risk. This procyclicality in financial expansion and contraction periods has wider impacts for developing economies such as Turkey. The current study has looked into the procyclicality of leverage ratios for deposit banks in Turkey. This research has focused on the association between change in total assets and leverage ratios for top ten deposit banks in Turkey by using the least square method. Data span is between December 2002 and December 2014, which has been assessed in quarterly periods. The study concluded that leverage ratios in Turkish banking industry is procyclical and leverage procyclicality can be implemented as a market control mechanism for Turkey.
Details
| Journal Section | Articles |
|---|---|
| Authors | |
| Publication Date | January 15, 2016 |
| Published in Issue | Year 2015 Volume: 2 Issue: 4 |
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