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Determining and Examining the Performance Index of Dual Banking System: A Panel Data Comparative Analyse for Turkey

Author

Listed:
  • Selim DEMEZ

    (Hakkari University, Faculty of Economics, Hakkari, Turkey)

  • Murat USTAOĞLU

    (Istanbul University, Faculty of Economics, Istanbul, Turkey)

  • Ahmet İNCEKARA

    (Istanbul University, Faculty of Economics, Istanbul, Turkey)

Abstract

In addition to basic financial transactions, the banks generate a variety of financial instruments and exploits the advantages associated with the globalization trend. It is not realistic to speak of an alternative that would end the domination of the interest-based conventional system in the global economy. However, Islamic banking, operating based on the profit and loss share, has become popular despite the fact that it has been introduced only some decades ago in some Muslim countries. The Islamic banking system has been in recent years compared to the conventional banking system. Measures taken in light of findings based on studies focusing on different variables and datasets will help minimize the impacts of the recessions and crises in the near future. This study analyzes the performance of three Islamic and nine conventional banks in Turkey after the 2008 global financial crisis (in the period of 2010-2015) by reliance on the panel data model. The findings in the study reveal that the conventional bank performance affects the banksize, reserves, real effective exchange rate and real interest rate whereas the impact has been greater in the case of Islamic banks upon banksize, deposit rate, reserves, market concentration, real effective exchange rate and real interest rate.

Suggested Citation

  • Selim DEMEZ & Murat USTAOĞLU & Ahmet İNCEKARA, 2018. "Determining and Examining the Performance Index of Dual Banking System: A Panel Data Comparative Analyse for Turkey," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 68(2), pages 221-241, December.
    • Handle: RePEc:ist:journl:v:68:y:2018:i:2:p:221-241
    DOI: 10.26650/ISTJECON2018-0001
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    References listed on IDEAS

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    More about this item

    Keywords

    Islamic Finance; conventional banks; performance index;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics

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