Liquidity risk and regulation in the Organization of the Islamic Cooperation (OIC) banking industry

IF 0.7 Q4 BUSINESS, FINANCE

Asian Academy of Management Journal of Accounting and Finance Pub Date : 2021-12-10 DOI:10.21315/aamajaf2021.17.2.2

Syajarul Imna Mohd Amin, Aisyah Abdul-Rahman, Nurhafiza Abdul Kader Malim

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引用次数: 1

Abstract

The recurring crises have evidenced poor liquidity risk management and ineffective regulation in banking. Consequently, banking regulations have undergone continuous reforms to bolster stability in the banking system. Nonetheless, theoretical and empirical evidence provide conflicting results that warrant comprehensive research, particularly for emerging Islamic banking. This study examines the role of banking regulation on the liquidity risk of 245 conventional banks and 68 Islamic banks from selected 14 Organization of the Islamic Cooperation (OIC) from 2000 to 2017 utilising the dynamic panel GMM (generalized method of moments) technique. We measure liquidity risk using the Net Stable Funding Ratio (NSFR) and the total financing-to-total deposits and short-term funding (LDEP). Meanwhile, the regulatory measures are asset restriction (AR), private monitoring (PM), supervisory power (SP) and capital requirements (CR). The findings suggest that regulation has a limited impact on bank liquidity risk. The CR supports the value creation of regulation through the reduction in banks’ liquidity risks, while PM and SP are agency costs of regulation that lead to higher liquidity risks. The impact of CR is lower on liquidity risk in Islamic banking than conventional ones, probably due to limited Islamic liquidity risk management facilities. Thus, regulators should strengthen Islamic liquidity risk instruments and markets to facilitate Islamic banking growth.

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伊斯兰合作组织(OIC)银行业流动性风险与监管

反复出现的危机表明，银行业流动性风险管理不力，监管不力。因此，银行业监管机构进行了持续的改革，以加强银行系统的稳定。尽管如此，理论和实证证据提供了相互矛盾的结果，值得进行全面研究，尤其是对新兴的伊斯兰银行业。本研究利用动态面板GMM（广义矩方法）技术，考察了2000年至2017年间，来自14个伊斯兰合作组织（OIC）的245家传统银行和68家伊斯兰银行的银行监管对流动性风险的影响。我们使用净稳定融资比率（NSFR）和总融资与存款和短期融资总额（LDEP）来衡量流动性风险。同时，监管措施包括资产限制（AR）、私人监控（PM）、监管权力（SP）和资本要求（CR）。研究结果表明，监管对银行流动性风险的影响有限。CR通过降低银行的流动性风险来支持监管的价值创造，而PM和SP是导致更高流动性风险的监管机构成本。CR对伊斯兰银行流动性风险的影响低于传统CR，这可能是由于伊斯兰流动性风险管理设施有限。因此，监管机构应加强伊斯兰流动性风险工具和市场，以促进伊斯兰银行业的增长。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Asian Academy of Management Journal of Accounting and Finance BUSINESS, FINANCE-

CiteScore

1.50

自引率

0.00%

发文量

审稿时长

20 weeks

期刊介绍： To provide a forum for the exchange of ideas and dissemination of empirical findings and analytical research in the specialized areas of accounting and finance with special emphasis on scholarly works with policy implications for countries in the Asia Pacific. The following are some of the topical subject areas relevant to the journal (but are not limited to): Accounting • Financial reporting and accounting standards • Auditing issues • Value based accounting and its relevance • Theory of accounting firm • Environmental auditing • Corporate governance issues • Public sector accounting Finance • Valuation of financial assets • International capital flows • Ownership and agency theory • Stock market behavior • Investment and portfolio management • Islamic banking and finance • Microstructures of financial markets