Loan-to-value policy: evidence from Turkish dual banking system
| Autor: | Ali Hepsen, Burak Pirgaip |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
050208 finance
05 social sciences Structural break Islam Monetary economics Loan-to-value ratio Chow test Dual (category theory) Loan 0502 economics and business Ordinary least squares Juvenile delinquency Economics Unit root 050207 economics Business and International Management Empirical evidence Finance |
| Zdroj: | International Journal of Islamic and Middle Eastern Finance and Management. 11:631-649 |
| ISSN: | 1753-8394 |
| Popis: | Purpose This paper aims to answer how effective the loan-to-value (LTV) regulation has been since 2011 for conventional and Islamic (participation) banks in Turkey in terms of curbing mortgage loan growth and delinquency[1]. Design/methodology/approach The authors first use unit root tests and tests of difference in loan and property price data in pre-LTV and post-LTV period. Second, the authors follow Chow test and ordinary least squares regression analyses to test for a structural break when sensitivity of mortgage loan and delinquency growth changes to property price changes considered. Findings The authors find that two periods are statistically different, while the significance level is lower for Islamic banks. Moreover, loan growth has become less responsive to property price increases; delinquency sensitivity to property price changes has significantly increased in the post-LTV period for conventional banks, while this is not the case for Islamic (participation) banks. Originality/value This paper not only increases empirical evidence regarding the effectiveness of LTV ratio policy but also fills the gap in the literature by providing a comparison between conventional banks and Islamic (participation) banks. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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