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Impact of Islamic Securitization (Sukuk) on Islamic Banks Liquidity Risk in Light of Basel III Requirements

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  • Bakhita Hamdow Gad Elkreem Braima

    (Investment & Finance Department, University of Tabuk, Tabuk, Saudi Arabia)

Abstract

This study aims to investigate the relation between Islamic securitization representing in Sukuk, and the Islamic banks ‘liquidities in light of Basel3 requirements. So that the study investigatesthree variables which include Islamic securitization as independent variable; net cash from financing activities and net noncore funding dependence ratio as dependent variables.The study follows quantitative method by employing cross sectional data context analysis. The data is collected from six banks over six countries through the period 2011-2013. Pearson regression is used to measure causal relation between Sukuk and Net Stable Fund Ratio (NSFR), hence the model is developed to describe the relation. The study uses net noncore funding dependence ratio as (NSFR) which was required by Basel III. The regression result finds that there is positive relation between Sukuk and NSFR for Islamic banks.Also the study uses loans / deposits ratio to discover the relation between Sukuk and Islamic banks ‘liquidity risk,so the regression test shows that there is positive relation between Sukuk and loans / deposit ratio.

Suggested Citation

  • Bakhita Hamdow Gad Elkreem Braima, 2017. "Impact of Islamic Securitization (Sukuk) on Islamic Banks Liquidity Risk in Light of Basel III Requirements," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 6(1), pages 85-100, January.
    • Handle: RePEc:rbs:ijfbss:v:6:y:2017:i:1:p:85-100
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    References listed on IDEAS

    as
    1. Asli Demirguk-Kunt & Thorsten Beck & Ouarda Merrouche, 2013. "Islamic Banking versus Conventional Banking: Business model, Efficiency, and Stability," Post-Print hal-01638080, HAL.
    2. Simplice A. Asongu, 2013. "Post‐crisis bank liquidity risk management disclosure," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 5(1), pages 65-84, April.
    3. Abdus Samad, 2004. "Performance Of Interest-Free Islamic Banks Vis-À-Vis Interest-Based Conventional Banks Of Bahrain," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 12(2), December .
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Sukuk; NSFR; Liquidity Risk; Basel;
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