DETERMINING THE OPTIMAL STRUCTURE OF FLOATING FUND IN THE TURKISH BANKING SECTOR

Maturity deposits are classified as time deposits and demand deposits. Demand deposits represent deposits that are deposited to withdraw when requested, while time deposits represent deposits deposited to a certain level with a certain interest rate. Demand deposits usually show deposits held in the banking system in order to make transactions. Demand deposits are liquid and cheap cost sources of funds for the banks. Another type of fund source that is assessed in demand deposits is floating funds. Floating funds are the funds that enter the bank and wait for a few days. With the technological advancements, banks have changed the demand deposit ratio offered to deposit owners that are within the variety of non-traditional products. The aim of this study is to determine the optimal rate of floating funds that deposit banks try to aggregate to reduce the average resource costs. The information regarding the maturity structure of deposits shown in financial statement footnotes of deposit banks in Turkey from 2003 to 2017 is used in this study. As a result, with a quadratic model the optimal demand deposit ratio in total deposits has been found as %28,64 with the help of panel data analysis method