Financing government budget deficit as a liquidity risk mitigation tool for Islamic Banks A dynamic approach

Boumediene, Aniss,(2015), Financing government budget deficit as a liquidity risk mitigation tool for Islamic Banks A dynamic approach. , International Journal of Islamic and Middle Eastern Finance and Management, UNSPECIFIED

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Abstract

Purpose – The purpose of the paper is to construct a framework constituting a link between Islamic banks’ excess liquidity and states’ financing needs, in an Islamic way.evel0. Design/methodology/approach – The framework, constituting a linkage between Islamic banks’ funding capacity and governments’ financing needs, is constructed using a money market approach. Later on, the volatility of existing sovereign Sukuk is compared to corporate Sukuk, using generalized autoregressive conditional heteroskedasticity (GARCH) (1, 1) model, to assess the stability of the secondary market for Islamic government securities. Findings – The volatility is weak for the Sukuk studied; this means that there is stability of the secondary market for Sukuk (sovereign and corporate). Originality/value – This is the first paper that presents a framework dealing directly with Muslim states’ budget deficit and debt. The framework includes Islamic banks, public companies, the central bank, Ministry of Finance and the government.
Keywords : Volatility, Islamic banks, Budget deficit financing, Liquidity risk management, UNSPECIFIED
Journal or Publication Title: International Journal of Islamic and Middle Eastern Finance and Management
Volume: 8
Number: 3
Item Type: Article
Subjects: Ekonomi Islam
Depositing User: Heru Prastyo
Date Deposited: 19 Dec 2019 07:34
Last Modified: 19 Dec 2019 07:34
URI: https://repofeb.undip.ac.id/id/eprint/433

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