Impact of exchange rate regimes on financial stability and policy reccomendations: The case of Turkey

The fact that exchange rates are the basis of the recent financial crises has led to increased trends in questioning the effect of exchange rate regimes on financial stability. After these crises, the effects of exchange rate regimes, which were previously only handled at the macroeconomic level, began to be questioned in terms of financial markets and financial stability. From this point of this work in Turkey in 2003: 03 and 2019: 11 period between the impact on the exchange rate regime and financial stability were investigated. According to the results obtained from the econometric analysis applied in the study, both on the financial stability of the exchange rate regime in Turkey and in practice it has an impact on the financial stability of the exchange rate regime. However, there is no clear distinction as to which exchange rate regime is most effective in ensuring financial stability. Because, the effects of exchange rate regimes on financial stability are changing as of the periods discussed. Keywords: Exchange rates, exchange rate regimes, financial stability, financial pressure index, time series analysis