The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia

This study empirically examines the stability and the main factors that have influenced the deposits in the Malaysian banking system. A structural model of the Malaysian money deposits applied to annual data for the 1983-2001 periods was designed. This structural model consists offve behavioural equ...

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Main Authors:	Remali Yusoff, Wilson, Rodney
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2009
Online Access:	http://journalarticle.ukm.my/7873/ http://journalarticle.ukm.my/7873/ http://journalarticle.ukm.my/7873/1/1475-2769-1-SM.pdf

id	ukm-7873
recordtype	eprints
spelling	ukm-78732016-12-14T06:45:29Z http://journalarticle.ukm.my/7873/ The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia Remali Yusoff, Wilson, Rodney This study empirically examines the stability and the main factors that have influenced the deposits in the Malaysian banking system. A structural model of the Malaysian money deposits applied to annual data for the 1983-2001 periods was designed. This structural model consists offve behavioural equations and three identities. A structural model functional form is used and estimated using the ordinary least squares in the log linear form. The behavioural equations are used to estimate the injluences of various factors on the conventional demand deposits, conventional time deposits, Islamic demand deposits, Islamic time deposits, and Islamic investment deposits. The implications of the study are that the increase in real gross domestic product, interest rate stability, and an increase in the profit-share for savings and investments are important for maintaining and enhancing the development of Malaysian money deposits. The results show that all the models (conventional and Islamic banks deposits) are stable; however Islamic demand deposits and Islamic time deposits are more stable than conventional demand deposits and conventional time deposits, because their Chow tests valzres are smaller than those of conventional deposits. The findings of this study suggests that as shariah compliant deposits are more stable than their conventional equivalents, then this makes a run on deposits less likely, reducing the potential amount of capital adequacy cover needed. Penerbit Universiti Kebangsaan Malaysia 2009 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/7873/1/1475-2769-1-SM.pdf Remali Yusoff, and Wilson, Rodney (2009) The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia. Jurnal Ekonomi Malaysia, 43 . pp. 67-83. ISSN 0127-1962 http://www.ukm.my/fep/jem/
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	This study empirically examines the stability and the main factors that have influenced the deposits in the Malaysian banking system. A structural model of the Malaysian money deposits applied to annual data for the 1983-2001 periods was designed. This structural model consists offve behavioural equations and three identities. A structural model functional form is used and estimated using the ordinary least squares in the log linear form. The behavioural equations are used to estimate the injluences of various factors on the conventional demand deposits, conventional time deposits, Islamic demand deposits, Islamic time deposits, and Islamic investment deposits. The implications of the study are that the increase in real gross domestic product, interest rate stability, and an increase in the profit-share for savings and investments are important for maintaining and enhancing the development of Malaysian money deposits. The results show that all the models (conventional and Islamic banks deposits) are stable; however Islamic demand deposits and Islamic time deposits are more stable than conventional demand deposits and conventional time deposits, because their Chow tests valzres are smaller than those of conventional deposits. The findings of this study suggests that as shariah compliant deposits are more stable than their conventional equivalents, then this makes a run on deposits less likely, reducing the potential amount of capital adequacy cover needed.
format	Article
author	Remali Yusoff, Wilson, Rodney
spellingShingle	Remali Yusoff, Wilson, Rodney The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia
author_facet	Remali Yusoff, Wilson, Rodney
author_sort	Remali Yusoff,
title	The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia
title_short	The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia
title_full	The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia
title_fullStr	The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia
title_full_unstemmed	The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia
title_sort	stability of deposits in the interest-based and interest-free banking systems in malaysia
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2009
url	http://journalarticle.ukm.my/7873/ http://journalarticle.ukm.my/7873/ http://journalarticle.ukm.my/7873/1/1475-2769-1-SM.pdf
first_indexed	2023-09-18T19:50:51Z
last_indexed	2023-09-18T19:50:51Z
_version_	1777406209590034432

The stability of deposits in the Interest-Based and Interest-Free Banking Systems in Malaysia

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