Navigating Global Uncertainties: The Financial Soundness of the Turkish Banking Sector in The Post-Reform Era

Authors : Merve Tuncay

Pages : 155-180

Doi:10.25095/mufad.1759911

View : 141 | Download : 309

Publication Date : 2026-01-02

Article Type : Research Paper

Abstract :The Turkish banking sector experienced structural reforms in the early 2000s, ranging from increasing transparency in the processes to supporting macroeconomic stability, which later enabled it to be less vulnerable to financial turmoil in the subsequent years. Yet, since than many transformations which gave rise to regional or global uncertainties have occurred, and caused destabilizing effects on financial markets. This study aims to reveal how the banking sector reacts to different shocks in global uncertainty factors. Understanding potential risk factors that may affect the banking sector is necessary to maintain financial soundness. In this context, the overall banking sector, deposit banks, and bank groups according to their capital ownership are considered. The global uncertainty factors considered are financial uncertainty, global economic policy uncertainty, trade policy uncertainty, and geopolitical risk. As the financial soundness indicator, the Z-score is considered. The annual data obtained for the period 2002-2023 were analyzed using the nonlinear autoregressive distributed lag approach. The findings indicate that “Global Economic Policy Uncertainty-GEPU” has the strongest negative effect, while” Trade Policy Uncertainty-TPU” has the weakest. The study contributes in the existing literature by investigating the effects of global uncertainties on different bank groups in Türkiye using a nonlinear method.
Keywords : Finansal piyasa ve kurumlar, Türk bankacılık sektörü, Küresel belirsizlik faktörleri, asimetrik şoklar, NARDL

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