(Case of Indonesia 2000-2008)
By: Rifki Ismal
Journal of Islamic Banking & Finance Jan-Mar 2009
Abstract
Model of Islamic banking behavior in competitive banking sector is derived to find theoretical variables which determine the balance of asset and liability side. In fact, total deposit is driven by return sharing paid by Islamic banks to their account holders; PLS return gained by Islamic banks; cost of banking activities and SBI rate. On the other hand, total financing is also influenced by the same variables (but from bank’s point of view) and profit from non operational financing. At the end, the potential of liquidity mismatch should be anticipated along with the role of regulator to manage the balance of industry’s liquidity.
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