Liquidity Risk Management in Islamic Banking: Comparative Analysis with SUR Methodology for Turkey

The low interest of Islamic banking in managing its liquidity risk management on Islamic Interbank Money Market (IIMM) has led to sluggish development of IIMM. The purpose of this study is to determine the effect of risk management of Islamic banking liquidity, determine the factors that cause the relationship of influence between the management of liquidity risk and IIMM Return, and knowing the prospects of risk management issues of Islamic bank liquidity concern to the development of IIMM. This research use descriptive and ARCH and GARCH. The results show the variant of EGARCH (1,1) as the best model with R2 1.44%. The Factors affect to IIMM are FDR, STM and Return.Keywords: IIMM Volume, Liquidity Risk, STM and FDR Risk, Return, ARCH and GARCH.

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THE INFLUENCE OF FIRM SIZE, CAPITAL ADEQUACY, AND PROFITABILITY ON LIQUIDITY RISK MANAGEMENT OF INDONESIA ISLAMIC BANKING

Journal of Business Economics ◽

10.35760/eb.2018.v23i2.1817 ◽

2018 ◽

Vol 23 (2) ◽

pp. 114-129

Author(s):

Anyssa Riyan Puteri

Keyword(s):

Risk Management ◽

Firm Size ◽

Hypothesis Test ◽

Liquidity Risk ◽

Capital Adequacy ◽

Descriptive Statistics ◽

Islamic Banking ◽

Islamic Banks ◽

Return On Equity ◽

Independent Variables

One of the problems facing sharia banking is liquidity risk management. Liquidity risk management in Islamic banking faces greater challenges because they need to be in accordance with Sharia. This research aims to determine the influence of firm size, capital adequacy, and profitability with return on asset and return on equity as proxies, on Indonesian Islamic banking liquidity risk management which is listed in Bank Indonesia in the period 2010-2014. This research uses panel data from eleven Islamic banks. The dependent variable in this research is liquidity risk and the independent variables are firm size, capital adequacy, and profitability with return on asset and return on equity as proxies. The method of analysis in this research uses descriptive statistics, regression model selection, classic assumption test, and hypothesis test. The results show that firm size, capital adequacy, and profitability with return on asset and return on equity as proxies simultaneously affect liquidity risk management, where partially return on equity does not affect liquidity risk management. Keywords: Capital Adequacy, Firm Size, Islamic Banking, Liquidity Risk Management, Profitability

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Nexus between Liquidity Risk and Islamic Banking Performance

rahatulquloob ◽

10.36902/rahat-vol3-iss2-2019(63-70) ◽

2019 ◽

pp. 63-70

Author(s):

Nadeem Iqbal ◽

Dr. Arshad Muneer Laghari ◽

M. Mohsin

Keyword(s):

Risk Management ◽

Regression Analysis ◽

Random Sampling ◽

Banking Sector ◽

Liquidity Risk ◽

Simple Random Sampling ◽

Bank Performance ◽

Islamic Banking ◽

Islamic Banks ◽

Management Tools

The study aims to assess liquidity risk of Islamic banking sector with Islamic banks performance working under Sharia jurisdictions. To deduct this six Islamic banks are selected of Pakistan by deploying regression analysis on panel data. Simple random sampling is used to select these banks to assess liquidity risk management tools of study. For performance profitability index is used generated by ROA, ROE and EPS. Thus the results inferred that liquidity risk proponents have significant role on bank performance and there is dire need to focus risk management compliance practices and regulations by these banks to reduce banks financial disparity. The value of study is in itself that has less focused in previous studies revealing its originality.

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Liquidity risk and regulation in the Organization of the Islamic Cooperation (OIC) banking industry

Asian Academy of Management Journal of Accounting and Finance ◽

10.21315/aamajaf2021.17.2.2 ◽

2021 ◽

Vol 17 (2) ◽

pp. 29-62

Author(s):

Syajarul Imna Mohd Amin ◽

Aisyah Abdul-Rahman ◽

Nurhafiza Abdul Kader Malim

Keyword(s):

Risk Management ◽

Generalized Method Of Moments ◽

Banking System ◽

Liquidity Risk ◽

Banking Regulation ◽

Capital Requirements ◽

Islamic Banking ◽

Private Monitoring ◽

Conventional Banks ◽

The Impact

The recurring crises have evidenced poor liquidity risk management and ineffective regulation in banking. Consequently, banking regulations have undergone continuous reforms to bolster stability in the banking system. Nonetheless, theoretical and empirical evidence provide conflicting results that warrant comprehensive research, particularly for emerging Islamic banking. This study examines the role of banking regulation on the liquidity risk of 245 conventional banks and 68 Islamic banks from selected 14 Organization of the Islamic Cooperation (OIC) from 2000 to 2017 utilising the dynamic panel GMM (generalized method of moments) technique. We measure liquidity risk using the Net Stable Funding Ratio (NSFR) and the total financing-to-total deposits and short-term funding (LDEP). Meanwhile, the regulatory measures are asset restriction (AR), private monitoring (PM), supervisory power (SP) and capital requirements (CR). The findings suggest that regulation has a limited impact on bank liquidity risk. The CR supports the value creation of regulation through the reduction in banks’ liquidity risks, while PM and SP are agency costs of regulation that lead to higher liquidity risks. The impact of CR is lower on liquidity risk in Islamic banking than conventional ones, probably due to limited Islamic liquidity risk management facilities. Thus, regulators should strengthen Islamic liquidity risk instruments and markets to facilitate Islamic banking growth.

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MANAJEMEN RISIKO PADA BANK SYARIAH

10.31219/osf.io/yj9kb ◽

2019 ◽

Author(s):

Afriyeni Afriyeni ◽

Romi Susanto

Keyword(s):

Risk Management ◽

Credit Risk ◽

Liquidity Risk ◽

Deep Understanding ◽

Islamic Banking ◽

Islamic Banks ◽

Legal Risk ◽

The World ◽

Banking Business ◽

Conventional Banks

Research and experience over the last two decades has resulted in a deep understanding of issues relating to risk management and the principles of a well established risk faced by management. The company managers are increasingly recognizing the importance of risk management. In the context of risk management, the guidelines were implemented over the years, made only for conventional banks. Whereas players in the world and national banking business not only conventional banks, but has also been enlivened by banks with Islamic principles that number continues to increase from year to year. This paper gives an overview of how risk management in Islamic banking. In general, the risks faced by Islamic banking can be classified into two major parts. Ie the same risks faced by conventional banks and the risk that is unique because it must follow the principles of sharia. Credit risk, market risk, benchmark risk, operational risk, liquidity risk, and legal risk, Islamic banks must be faced. But, because they have to abide by the rules of Sharia, the risks faced by Islamic banks had to be different.

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