REGULATING CHECK USE IN TURKEY

Tümen S.

CENTRAL BANK REVIEW, cilt.12, sa.1, ss.1-12, 2012 (ESCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 12 Sayı: 1
  • Basım Tarihi: 2012
  • Dergi Adı: CENTRAL BANK REVIEW
  • Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI), TR DİZİN (ULAKBİM)
  • Sayfa Sayıları: ss.1-12
  • Anahtar Kelimeler: Checks, Regulation, Monopoly, Heterogeneous preferences
  • TED Üniversitesi Adresli: Hayır

Özet

This paper develops a simple model of the market for checks in Turkey. The Central Bank controls the lump-sum amount that the drawee banks are legally responsible to pay per bad check. An increase in this amount is believed to support real economy. I show that banks will tend to restrict the quantity of checks when this responsibility is increased. A percentage point increase in banks' obligation per bad check could lead up to a 1.7% decline in the total supply of checks on the margin. This means that a rise in this obligation may harm the real economy rather than providing support.