Abstract:

The non-core liabilities in the Turkish banking system have tended to increase since 2012. The growing credit gap differs from the general trend, the profitability decreases, the non-performing loans gradually increase and high borrowing occurs in the real sector. Based on this evidence, our study deals with the effects of non-core liabilities over the stability of the Turkish banking sector as a crisis dynamic. The research has been based on extensive samples covering 2011 to 2019 employing the panel data model and it is showing the effect of the increase in non-core liabilities over banking and exchange rate crisis among the so called Fragile Five Countries including Turkey. The key finding is the definition for the positive impact of the increase in non-core liabilities upon the banking and exchange rate crisis. The non-core liabilities to GDP ratio also helps us to overview how the bank debts affect the economic situation when they exceed their core-liabilities.

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