Liquidity risk, credit risk and stability in Islamic and conventional banks

Hassan, M. Kabir and Khan, Ashraf and Paltrinieri, Andrea,(2019), Liquidity risk, credit risk and stability in Islamic and conventional banks. , Research in International Business and Finance, UNSPECIFIED

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Abstract

The aim of this paper is to provide a thorough assessment of Islamic banks’ (IBs) liquidity risk compared to conventional banks (CBs). We firstly investigate the relationship between liquidity and credit risk. Employing a simultaneous structural equation approach, on a comprehensive dataset of 52 IBs and CBs, from selected Organization of Islamic Cooperation Countries for the period of 2007–2015, we find that credit risk and liquidity risk have negative relationship. We then investigate the relationship between liquidity risk and stability, finding a negative relationship just for IBs. We finally show that Islamic banks are better than conventional in managing risks.
Keywords : Islamic banks; Liquidity risk; Credit risk; Stability; Z-score; Distance to Default, UNSPECIFIED
Journal or Publication Title: Research in International Business and Finance
Volume: 48
Number: UNSPECIFIED
Item Type: Article
Subjects: Ekonomi Islam
Depositing User: Heru Prastyo
Date Deposited: 26 Dec 2019 06:15
Last Modified: 26 Dec 2019 06:15
URI: https://repofeb.undip.ac.id/id/eprint/843

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