Securitization in Turkish banking system

By using data from 8 depository institutions in Turkey we evaluate the drivers of securitization between 2004 and 2009. Our analysis shows that previous period securitization as well as bank equity, level of profits and asset size are important factors in a bank’s decision to securitize its loan portfolio. Banks’ on-balance sheet liquidity on the other hand is not a significant factor. We also use a binary probit model and predict with good certainty the timing of a bank’s securitization in capital markets. Again, bank size, profitability and equity are also explanatory variables in making these accurate predictions.