Unravelling the Impact of COVID-19 on The Turkish Banking Sector: An Empirical Analysis

Abstract

This study aims to examine the impact of COVID-19 on the Turkish Banking Index of the Istanbul Stock Exchange. Bayer-Hanch Cointegration Test, a Canonical Cointegrating Regression, and a Fully Modified Least Squares test were examined. Gold price, Repo, exchange rate, and the COVID-19 cases exhibit a long-run relationship with the banking index. During the pandemic, COVID-19 cases affected banks' performance in a negative way at the Istanbul Stock Exchange. No study in the literature has specifically examined the impact of COVID-19 on the Turkish Banking Index using the Bayer Hanch Co-integration strategy. Therefore, this study provides valuable insight into the literature.