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Determinants Of Systematic And Unsystematic Liquidity Risk In Islamic Banks

Author

Listed:
  • Anwar Hussain

    (Ghazi University, Department of Business Administration, Dera Ghazi Khan, Pakistan)

  • Ploypailin Kijkasiwat

    (Corresponding Author, The Faculty of Business Administration and Accountancy, Khon KaenUniversity, Thailand)

  • Bushra Mobeen Ijaz

    (Faculty of Management Sciences, University of Lahore, Pakistan)

  • Fitim Deari

    (South East European University, Faculty of Business and Economics, Republic of Macedonia)

Abstract

This study examines whether systematic (macroeconomic) and unsystematic (bank specific) factors determine liquidity risk in Islamic banks. The study employs a sample of Islamic banks from Pakistan, Qatar, Malaysia, UAE, Bangladesh, Bahrain, and Saudi Arabia over the period 2008 – 2019. Using Least Square estimation methods to estimate the model separately for each country, we find the results to be mixed and different across countries. The results also show that non-performing loans, bank size, leverage ratio and return on assets are key unsystematic drivers in determining the liquidity risk of Islamic banks. This study points out the fragility of Islamic banks in relation to managing liquidity risk.

Suggested Citation

  • Anwar Hussain & Ploypailin Kijkasiwat & Bushra Mobeen Ijaz & Fitim Deari, 2022. "Determinants Of Systematic And Unsystematic Liquidity Risk In Islamic Banks," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 8(2), pages 325-340, May.
    • Handle: RePEc:idn:jimfjn:v:8:y:2022:i:2h:p:325-340
    DOI: https://doi.org/10.21098/jimf.v8i2.1474
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    Cited by:

    1. Wahida Ahmad & Nur Hazimah Amran, 2023. "Non-linear Panel Data Liquidity Model of Islamic and Conventional Banks," Information Management and Business Review, AMH International, vol. 15(4), pages 316-325.
    2. Adel Bogari, 2023. "Banking Transparency, Financial Information and Liquidity Risk Management: Case of Saudi Banks," International Business Research, Canadian Center of Science and Education, vol. 16(11), pages 1-42, November.

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