Analysis of The Impact of Risks in The Turkish Banking Sector on Investor Behavior

This research examined the effects of Turkish banking risks on investor behavior. this context, the period of nine deposit banks covering the period between 2008:Q3-2019:Q3 was analyzed using panel regression estimators. Researchers found that systemic and systematic risks negatively affected investor sentiment in the real sector. The rise in systemic and market risks of banks has led to an increase in investor pessimism. The findings showed that the real sector confidence index can be used as an effective early warning system for financial instability. It has shown that banking sector risks have the potential to spread to the entire economy through real sector investment behavior. The results revealed that stock returns positively affect real-sector investment behavior. Accordingly, positive developments in the stock markets encouraged the real-sector to invest. In the research, the effects of selected macro variables on investor sentiment were analyzed. The forecast results documented that inflation rates, the current account balance, and the VIX uncertainty index negatively affected real-sector investor behavior. On the contrary, it was determined that the effect of the MSCI Europe index on investor sentiment was positive.