Economics

Permanent URI for this collectionhttps://hdl.handle.net/10679/316

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Browsing by Institution Author "ÖZSOY, Satı Mehmet"

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    ReviewPublicationMetadata only
    Bank regulation under fire sale externalities
    (Oxford University Press, 2020-06) Kara, G. I.; Özsoy, Satı Mehmet; Economics; ÖZSOY, Satı Mehmet
    We examine the optimal design of and interaction between capital and liquidity regulations. Banks, not internalizing fire sale externalities, overinvest in risky assets and underinvest in liquid assets in the competitive equilibrium. Capital requirements can alleviate the inefficiency, but banks respond by decreasing their liquidity ratios. When capital requirements are the only available tool, the regulator tightens them to offset banks' lower liquidity ratios, leading to fewer risky assets and less liquidity compared with the second best. Macroprudential liquidity requirements that complement capital regulations implement the second best, improve financial stability, and allow for more investment in risky assets.
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    ArticlePublicationMetadata only
    Firm boundaries, incentives, and fund performance: Evidence from a private pension fund system
    (Elsevier, 2020-06) Gölçen, Umut; Özsoy, Satı Mehmet; Yalçın, Atakan; Economics; International Finance; GÖKÇEN, Umut; ÖZSOY, Satı Mehmet; YALÇIN, Atakan
    The private pension fund system in Turkey presents a unique institutional structure where bank holding companies can own both private pension companies and asset management firms. More often than not, pension companies delegate their operational mandates to the asset management arm of the same bank. This practice exposes the retail investor to a double agency problem and raises questions about conflicts of interest and fiduciary duty. Our analysis reveals that the funds set up and managed under the same bank holding company perform worse on a risk-adjusted basis than the funds with an arm's length relationship between the pension company and the asset manager. We show that this relative underperformance is not simply a bank effect; bank-affiliated pension companies and asset managers do just as well, if not better than their peers, when they are not operating under the same roof. Unfortunately, this inefficient institutional structure is not eliminated by market discipline because these funds attract more flows from retail investors, and the underperformance is not discernible in raw returns.
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    Book ChapterPublicationMetadata only
    Global trends in liquidity creation: The role of the off-balance sheet
    (Peter Lang AG, 2019-03-28) Akın, Özlem; Özsoy, Satı Mehmet; Economics; International Finance; PARLAYAN, Özlem Akın; ÖZSOY, Satı Mehmet
    Banks create liquidity by transforming liquid liabilities into illiquid assets and this is one of their main functions. Yet excessive liquidity creation, especially via off-balance sheet activities, might have contributed to the 2008-2009 financial crisis. In this chapter, we analyze the dynamics of liquidity creation in Turkey and the United States, and the contribution of off-balance sheet activities therein.