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Bank Specific and Macroeconomics Dynamic Determinants of Credit Risk in Islamic Banks and Conventional Banks
journal contribution
posted on 2016-10-20, 12:10 authored by Waeibrorheem WaemustafaWaeibrorheem Waemustafa, Suriani SukriThe study analyzes macroeconomic and bank specific determinants of credit risk in Islamic and Conventional Banks. Multivariate Regression analysis is applied on the sample of 15 conventional banks and 13 Islamic Banks in Malaysia over the period between 2000 and 2010. The finding shows that the banks specific determinants of credit risk are uniquely influenced the credit risk formation of Islamic and Conventional banks. The study found
that risky sector financing; regulatory capital (REGCAP) and Islamic Contract are significant to credit risk of Islamic banks. For Conventional Banks, loan loss provision, debt-to-total asset ratio, REGCAP, size, earning management and Liquidity are significant factors influencing credit risk. As for macroeconomic factors only Inflation and M3 are significant to credit risk for both Islamic and Conventional banks.
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Determinants of Credit RisksMurabahah and Bai-Bhithaman AjilIslamic contractsIslamic bankingConventional bankingIslamic and Conventional BankingCredit riskSyetematic riskMacroeconomicsBank specific riskUnsystematic riskLiquidity riskIslamic financingBanking, Finance and Investment not elsewhere classifiedFinanceFinancial Institutions (incl. Banking)Investment and Risk ManagementFinancial Accounting
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