Credit Growth Volatility

Oduncu, Arif and Ermişoğlu, Ergun and Polat, Tandogan (2013): Credit Growth Volatility.

Abstract

The Central Bank of the Republic of Turkey has started to implement its new policy mix since late 2010. In this new approach expectations, credit growth and reel exchange rate are monitored closely as key indicators for financial stability on top of price stability. The effect of this new monetary policy framework on the volatility of credit growth is the main theme of this note. To the best of our knowledge, we are the first to analyze the impact of new policy mix on the credit growth volatility. It is shown that there is a significant decrease in the volatility of credit growth after the introduction of new policy framework at late 2010. Therefore, it can be said that this new monetary policy framework contributes to financial stability in Turkey by lessening the credit growth volatility.

• Item Type: MPRA Paper
• Language: English
• Keywords: Volatility, Credit growth, Central banking, CBRT’s new policy mix, Financial Stability
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies

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