Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia

Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia

This study intends to determine the impact of monetary policy changes on Islamic banks vis-a-vis conventional banks. In achieving this, the study explores the dynamic inter-relationships between deposits and loans of the Islamic and conventional banks with monetary policy variable using two major te...

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Main Authors: Kassim, Salina, Abdul Majid, M. Shabri
Format: Article
Language:English
Published: Inderscience Enterprises Ltd 2009
Online Access:http://irep.iium.edu.my/11815/
http://irep.iium.edu.my/11815/
http://irep.iium.edu.my/11815/1/IJMEF_2%283-4%29_Paper_5%5B1%5D_drsalina.pdf
id iium-11815
recordtype eprints
spelling iium-118152012-05-03T06:26:55Z http://irep.iium.edu.my/11815/ Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia Kassim, Salina Abdul Majid, M. Shabri This study intends to determine the impact of monetary policy changes on Islamic banks vis-a-vis conventional banks. In achieving this, the study explores the dynamic inter-relationships between deposits and loans of the Islamic and conventional banks with monetary policy variable using two major tests. First, the Auto-Regressive Distributed Lag (ARDL) model is used to examine the long-run relationship among the variables. Second, the Vector Error-Correction Model (VECM) is adopted to explore the short- and long-run dynamics between the variables. The study focuses on Malaysian data covering the period from January 1998 to December 2006. The study finds that the Islamic banks' balance sheet items are relatively more sensitive to monetary policy changes, compared to the conventional banks balance sheet items. This implies that the impact of monetary policy is more de-stabilising on the Islamic banks than on the conventional banks. Inderscience Enterprises Ltd 2009-11-03 Article PeerReviewed application/pdf en http://irep.iium.edu.my/11815/1/IJMEF_2%283-4%29_Paper_5%5B1%5D_drsalina.pdf Kassim, Salina and Abdul Majid, M. Shabri (2009) Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia. International Journal of Monetary Economics and Finance, 2 (3). pp. 239-253. ISSN 1752-0487 (Online) https://inderscience.metapress.com/content/3321h0110461v668/resource-secured/?target=fulltext.pdf
repository_type Digital Repository
institution_category Local University
institution International Islamic University Malaysia
building IIUM Repository
collection Online Access
language English
description This study intends to determine the impact of monetary policy changes on Islamic banks vis-a-vis conventional banks. In achieving this, the study explores the dynamic inter-relationships between deposits and loans of the Islamic and conventional banks with monetary policy variable using two major tests. First, the Auto-Regressive Distributed Lag (ARDL) model is used to examine the long-run relationship among the variables. Second, the Vector Error-Correction Model (VECM) is adopted to explore the short- and long-run dynamics between the variables. The study focuses on Malaysian data covering the period from January 1998 to December 2006. The study finds that the Islamic banks' balance sheet items are relatively more sensitive to monetary policy changes, compared to the conventional banks balance sheet items. This implies that the impact of monetary policy is more de-stabilising on the Islamic banks than on the conventional banks.
format Article
author Kassim, Salina
Abdul Majid, M. Shabri
spellingShingle Kassim, Salina
Abdul Majid, M. Shabri
Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia
author_facet Kassim, Salina
Abdul Majid, M. Shabri
author_sort Kassim, Salina
title Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia
title_short Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia
title_full Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia
title_fullStr Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia
title_full_unstemmed Sensitivity of the Islamic and conventional banks to monetary policy changes: the case of Malaysia
title_sort sensitivity of the islamic and conventional banks to monetary policy changes: the case of malaysia
publisher Inderscience Enterprises Ltd
publishDate 2009
url http://irep.iium.edu.my/11815/
http://irep.iium.edu.my/11815/
http://irep.iium.edu.my/11815/1/IJMEF_2%283-4%29_Paper_5%5B1%5D_drsalina.pdf
first_indexed 2023-09-18T20:21:05Z
last_indexed 2023-09-18T20:21:05Z
_version_ 1777408111311585280

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