The Impact of Macroeconomic Variables on Participation Banks An Analysis within the Scope of CAMELS Model

Authors : Mehmet Sinan Çelik

Pages : 61-74

View : 36 | Download : 17

Publication Date : 2025-06-29

Article Type : Research Paper

Abstract :This study analyzes the impact of macroeconomic variables on CAMELS performance indicators of participation banks. In the study, data from participation banks operating in Turkey for 2019-2023 were used, and the panel regression analysis method was applied. The analysis results show that the budget balance variable negatively and significantly affects all CAMELS components. This situation reveals that an increase in the budget deficit negatively affects the capital adequacy, asset quality, management effectiveness, profitability, and liquidity of participation banks. On the other hand, the money supply (M2) variable generally has a positive and significant effect, indicating that an increase in money supply strengthens the financial performance of participation banks. The GDP growth rate negatively and significantly impacts some models, suggesting that economic growth may pressure certain financial indicators. The inflation variable is not found to be statistically significant in general and has a positive and significant effect only for the management effectiveness model. In conclusion, macroeconomic variables have different effects on financial indicators of participation banks in different directions and different ways. These results provide essential information for regulators and policymakers.
Keywords : CAMELS, Katılım Bankaları, Panel Regresyon

ORIGINAL ARTICLE URL