Financial stability and as an automatic stabilzator of reserve options mechanism

This study contains the automatic stabilizer feature of Reserve Options Mechanism designed by the CRBT to provide financial stabilty which investigate through VAR model. Automatic stabilizer function of ROM was investigated the effect of capital flows, exchange rate and usage of ROM variables on ROM by the impulse response analysis. As a result of impulse response analysis findings show that the ROM works as an automatic stabilizer, but this function is not symmtrical and works with a different channel. ROM works as an automatic stabilizer however this function is came true by the contribution of the other variables that affect ROM utilization as well as the cost of Turkish Lira and foreing currency resources.