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Jurnal Ekonomi Malaysia

51 (2) 2017 115 – 130

Struktur Pembiayaan dan Risiko Kecairan: Analisis Perbankan Islam Domestik dan Asing di Malaysia
Financing Structure and Liquidity Risk: An Analysis of Domestic and Foreign Islamic Banks in Malaysia

Fakulti Ekonomi dan Pengurusan
Universiti Kebangsaan Malaysia
43600 UKM Bangi Selangor
MALAYSIA

noraini_230190@yahoo.com

Fakulti Ekonomi dan Pengurusan
Universiti Kebangsaan Malaysia
43600 UKM Bangi Selangor
MALAYSIA

eychah@ukm.edu.my

Jabatan Syariah dan Ekonomi
Akademi Pengajian Islam
Universiti Malaya
50603 Kuala Lumpur MALAYSIA

ahmadazams@um.edu.my

Abstract

Liquidity risk stems from the failure of a bank to meet the demand from the bank’s liability to customer at an affordable cost in times of need. It may lead to bank insolvency and could affect the stability of the financial system. The failure of banks to effectively manage the financing structure may increase default risk and eventually liquidity risk. This study investigates and compares the financing structure-liquidity risk relationships between the Malaysian domestic and foreign Islamic banks. We adopt two measures of liquidity risk, namely; liquidity coverage ratio (LCR) and net stable funding ratio (NSFR). While LCR is a short-run measure of liquidity risk (30 days), NSFR is a longer term measure of liquidity risk (one year). For financing structure, we use four measures, namely real estate financing, specialization index (SPEC), and the stability of short-term (LCC) and long-term financing structure (VART).By using static panel regression of 10 domestic and seven foreign Islamic banks for the period of 1994-2014, the results show that financing structure of domestic Islamic banks have significant positive relationship with LCR. Specifically, by increasing financing to property sector as well as stability of short-term financing structure (LCC), the domestic Islamic banks are exposed to short-term liquidity risk (LCR). However, there is an inverse relationships with NFSR for the case of foreign Islamic banks, inferring that by increasing financing to property sector leads to decreasing longer term foreign Islamic banks’ liquidity risk (NSFR). These contradicting results could be due to the prudent strategy by foreign Islamic banks in providing financing to less risky clients. It is crucial for policy makers at macro and micro levels to consider the behavior of financing structure in improving liquidity risk management framework for Islamic banks. In addition, by looking at the trend of a bank’s financing structure, investors and customers can have a picture of a bank’s liquidity risk, thus helping them to make investment and saving decisions.

Keywords

financing structure; Islamic banks; liquidity risk

Author’s Acknowledgement

Penyelidikan ini dibiayai oleh Geran FRGS/1/2014/ SS05/UKM/02/5, KUIS-2017-001 (Kod: UKM-11KH- 05-FRGS0255-2010).

http://dx.doi.org/10.17576/JEM-2017-5001-10
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Bibliography

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Mat Yaakub, , Rahman, , & Sulaiman, (2017). Struktur Pembiayaan dan Risiko Kecairan: Analisis Perbankan Islam Domestik dan Asing di Malaysia. Jurnal Ekonomi Malaysia, 51(2), 115–130. http://dx.doi.org/10.17576/JEM-2017-5001-10

@article{matyaakub2017struktur,
  title={Struktur Pembiayaan dan Risiko Kecairan: Analisis Perbankan Islam Domestik dan Asing di Malaysia},
  author={Mat Yaakub, Noraini and Rahman, aisyah and Sulaiman, Ahmad Azam},
  journal={Jurnal Ekonomi Malaysia},
  volume={51},
  number={2},
  pages={115—130},
 

year={2017},
}

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