Measuring the Economic Impacts of 2000-2001 Financial Crisis and Reforms in Turkish Banking Sector via Synthetic Control Method

ÇINAR Y., GÖKSEL T.

15th International Conference on Finance and Banking, Prague, Çek Cumhuriyeti, 13 - 14 Ekim 2015, ss.14-21 identifier

  • Yayın Türü: Bildiri / Tam Metin Bildiri
  • Basıldığı Şehir: Prague
  • Basıldığı Ülke: Çek Cumhuriyeti
  • Sayfa Sayıları: ss.14-21
  • Anahtar Kelimeler: mathematical and quantitative methods, synthetic control method, banking sector, impacts of financial crisis, DISASTERS
  • Ankara Üniversitesi Adresli: Evet

Özet

A deep financial crisis, which is called the "2000 - 2001 Financial Crisis", affected the whole economy and especially the banking sector in Turkey, during the 2000-2001 period. In order to overcome the negative effects of this crisis, banking restructuring process had been started in May 2001. In this framework, this paper aims to measure the economic impacts of this crisis and reforms afterwards. via Synthetic Control Method (SCM). By using this method, we construct a synthetic counterpart of Turkey, in which there were no crisis, and no restructuring process, by using the same indicators of other countries' banking sectors. Then, we compare this "synthetic Turkey" with "actual Turkey", i.e. the actual values of the indicators, in order to estimate the effects of the crisis and reforms. Hence, we utilize SCM in banking and finance literature in order to measure the effects of crisis and reforms. Our results indicate that the crisis has negative impacts on both bank capital to total assets and ROE in Turkish banking sector during 2000 - 2001 period. On the other hand, our results also show that the reforms overwhelmed the negative effects of this crisis.