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Islamic Financing and Bank Behaviour in a Dual Banking System: Evidence from Malaysia

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  • Zulkhibri, Muhamed

    (The Islamic Research and Teaching Institute (IRTI))

Abstract

The paper examines the cross-sectional differences in the way that Islamic banks respond to base financing rate across bank-specific characteristics in a dual banking system using panel regression methodology. The evidence suggests that the bank-specific characteristics are important for Islamic banking financing behaviour. The Islamic banks financing behaviour is consistent with behaviour of conventional banks that the bank lending operates via banks depending on the level of size, liquidity and capital. The findings also suggest that there is no significant difference between Islamic bank financing and conventional bank lending behaviour with respect to interest rates.

Suggested Citation

  • Zulkhibri, Muhamed, 2016. "Islamic Financing and Bank Behaviour in a Dual Banking System: Evidence from Malaysia," Working Papers 2016-8, The Islamic Research and Teaching Institute (IRTI).
    • Handle: RePEc:ris:irtiwp:2016_008
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    References listed on IDEAS

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    More about this item

    Keywords

    Islamic Banks; Base Financing Rate; Bank Financing; Panel Regression Analysis;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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