The Properties of the Shadow Banking in China

The aim of this study is to define the properties of the shadow banking system in China.The shadow banking system has been paid attention since the subprime crisis because the spread of this finance form over the all around world was one of the most significant causes of the subprime crisis. The shadow banking is nourished from the Chinese state capitalism which is designed to allocate loans to important industries so SME are dependent on the shadow banking. Since excessively increase in leverage through financial engineering and purpose-made state capitalism create irresistible burden on financial market, the shadow banking system is by far the important factors in order to build stable financial market. While considering these issues, it was understood that the shadow banking system is significant issue in order to build strong financial efficiency and stability

Linear and Non-Linear Causality Tests of Stock Price and Real Exchange Rate Interactions in Turkey

The purpose of this study is to determine whether there is a causality relationship between stock price and real exchange rates in Turkey. Within this context, the study employs monthly data for real exchange rates based on consumer price index and BIST 100 index as representing stock prices that cover the periods from January 2005 to August 2017. On the other side, Granger causality test, Toda-Yamamoto causality analysis and Diks and Panchenko nonlinear causality test used for this purpose. As a result, Linear Granger causality, Toda-Yamamoto and Nonlinear Granger causality tests reveal that there is a casual relationship between real exchange rate and stock price in Turkish economy for the period of 2005:01 - 2017:08 and the direction of the causality is from stock price to exchange rate. This evidence can be interpreted as the changes in stock prices may strongly have influences on the success of foreign exchange rate policies