Anticompetitive Effects of the Banking Cartel in Turkish Loan Market

The aim of this paper is to measure the effect of the banking cartel on the competition in the Turkish loan market. In doing this, we use Bresnahan-Lau model with alternative supply relation definitions. Our results suggest that Turkish banks operate in the perfectly competitive conditions during the non-cartel period. However, with the enforcement of the cartel actively between September 2007 and September 2011, the competition intensity in the market was damaged significantly. All alternative models witness the robust conclusion that the banking cartel affected the competition in the loan market adversely