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An examination of factors affecting excess liquidity problem of Islamic banking in Malaysia

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dc.contributor.authorMd Hakim Ali
dc.contributor.supervisorSaiful Azhar Rosly
dc.date.accessioned2017-08-28T05:24:36Z
dc.date.available2017-08-28T05:24:36Z
dc.date.issued2017
dc.description.abstractAfter the global financial crisis, liquidity management has been a great concern to both Islamic and conventional banks, as liquidity management is linked to the bank's profitability and overall sustainability of financial system. While shortage of liquidity has taken centre-stage in Basel 3 reforms as a consequence of the US subprime loan crises, the problem of excess liquidity in Islamic banking remains unresolved in view of the lack of product offerings like medium term sukuk that should give relatively higher yields than short-term Islamic securities. Evidently, few literatures have examined the problem of excess liquidity in Islamic banks and no empirical evidence on the factors leading to the excess liquidity has been found. To shed light on that gap, this paper endeavours to find the catalysts of excess liquidity in Islamic banks using fixed effect and random effect model. The sample is taken form Malaysia considering homogeneous sample. Interestingly enough, both Islamic banks as well as conventional banks have been found to hold excess liquid assets. The availability and issuance of short-term Islamic securities and long-term sukuk, which was focused variable in this study has been found significantly affecting the excess liquidity in Islamic finance. Hence, based on this findings, the availability of short-term Islamic securities and long term sukuk have saved Islamic banks from inefficiency arising from low asset utilization and hence lower profitability. To increase efficient use of assets, it is recommended that Islamic financial institutions and Shariah compliant companies be more diligent in offering medium term sukuks.en_US
dc.identifier.citationAli, M. H. (2017). An examination of factors affecting excess liquidity problem of Islamic banking in Malaysia (Master dissertation). INCEIF, Kuala Lumpur. Retrieved from https://ikr.inceif.org/handle/INCEIF/2636en_US
dc.identifier.urihttps://ikr.inceif.org/handle/INCEIF/2636
dc.languageEnglish
dc.language.isoengen_US
dc.publisherINCEIFen_US
dc.rights2017. INCEIF
dc.sourceGS
dc.subjectIslamic bankingen_US
dc.subjectLiquidity managementen_US
dc.subjectBank liquidityen_US
dc.subjectMalaysiaen_US
dc.subjectProject paper (MSc)
dc.titleAn examination of factors affecting excess liquidity problem of Islamic banking in Malaysiaen_US
dc.typeMasteren_US
dlc.maintopicIslamic bankingen_US
dspace.entity.typePublication
ikr.doctypeTheses
ikr.licenseAvailable in physical copy (Call number: t HG 1656 A3 M478) and PDF format. Kindly email to kmc@inceif.org to access the item
ikr.topic.maintopicIslamic bankingen_US
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