Determinants of non-performing loans and banking costs during the 1999-2001 Turkish banking crisis

Masood, Omar and Stewart, Chris (2009) Determinants of non-performing loans and banking costs during the 1999-2001 Turkish banking crisis. International Journal of Risk Assessment and Management, 11(1/2), pp. 20-38. ISSN (print) 1466-8297

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Abstract

Using original survey data collected by the authors we investigate the determinants of non-performing loans and costs in the Turkish banking sector during the crisis period of 1999-2001. Employing ordered choice models, we find that variables measuring unnecessary government intervention and loans given to related companies significantly influenced both non-performing bank loans and the overall cost of the crisis. Poor credit risk assessment and a weak capital base of Turkish commercial banks have also led to a high percentage of non performing bank loans, whereas improper accounting practices, under capitalisation of Turkish banks, as well as weak regulation/supervision have been identified as variables which added to the high cost of the crisis.

Item Type: Article
Research Area: Economics and econometrics
Faculty, School or Research Centre: Faculty of Arts and Social Sciences > School of Economics (until November 2012)
Depositing User: Chris Stewart
Date Deposited: 01 May 2013 15:13
Last Modified: 29 Nov 2013 12:28
URI: http://eprints.kingston.ac.uk/id/eprint/25465

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