Risk Hazard of Banking in Emerging Countries (original) (raw)
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The first Indonesian Islamic bank is Bank Muamalat, established 1991, moreover, The Government of Indonesia was fully supporting at that time, and the bank started operations on 1 May 1992 (Bank Muamalat website, 2012). Malaysia started 9 years before, 1983. One must recognize Indonesian Islamic banking asset growth is higher than Malaysia for the last five years (2007-2011). Although Indonesia is considered to be late-comers, compare to Malaysia, therefore, their respective Islamic banking regulations are interesting to study. Malaysian‟s central bank, Bank Negara Malaysia had the same regulation on 1999. Both of the countries are now having dual banking system regulations. Regulatory and Supervisory Framework from IFSB, AAOIFI and Fiqh Academy must be seen as the benchmark regulations of Islamic banking. This study is intended to examine the regulatory framework especially, such as; capital adequacy, non-performing loans and entre deregulations, implementing in Indonesia and Malay...
Journal of Islamic Economics , Banking and Finance, 2013
The aim of this study is to determine the impact of the current global financial crisis on IBs compared to the CBs relying on accounting ratios. Firstly, we introduce 26 financial ratios in the stepwise Logit model to determine whether it is possible to distinguish between the two types of banks in the international context based on financial characteristics. Over 110 bank-year observations, we found that accounting ratios are good discriminators between IBs and CBs in the international context. Secondly, to determine the impact of the global financial crisis on IBs compared to the CBs, we introduce a new variable CRISIS which is a time condition that distinguishes between the crisis period and the pre-crisis period. Our main empirical results obtained from Logit analysis show clearly that IBs are more stable and immunized against the 2007-2008 crisis due to the requirements of the Shariaa.