Pirgaip, BurakHepşen, Ali2020-04-172020-04-172018Pirgaip, Burak; Hepsen, Ali, "Loan-to-Value Policy: Evidence From Turkish Dual Banking System", International Journal of Islamic and Middle Eastern Finance and Management, 11, No. 4, pp. 631-649, (2018).1753-8394http://hdl.handle.net/20.500.12416/3308Purpose-This paper aims to answer how effective the loan-to-value (LTV) regulation has been since 2011 for conventional and Islamic (participation) banks in Turkey in terms of curbing mortgage loan growth and delinquency[1]. Design/methodology/approach-The authors first use unit root tests and tests of difference in loan and property price data in pre-LTV and post-LTV period. Second, the authors follow Chow test and ordinary least squares regression analyses to test for a structural break when sensitivity of mortgage loan and delinquency growth changes to property price changes considered. Findings-The authors find that two periods are statistically different, while the significance level is lower for Islamic banks. Moreover, loan growth has become less responsive to property price increases; delinquency sensitivity to property price changes has significantly increased in the post-LTV period for conventional banks, while this is not the case for Islamic (participation) banks. Originality/value-This paper not only increases empirical evidence regarding the effectiveness of LTV ratio policy but also fills the gap in the literature by providing a comparison between conventional banks and Islamic (participation) banks.eninfo:eu-repo/semantics/closedAccessTurkeyIslamic BanksConventional BanksMacroprudential PolicyLoan-to-Value (LTV) RatioArticle11463164910.1108/IMEFM-08-2017-0208