The impact of bank-specific, market-specific and institutional governance factors on Islamic banks' cost of financial intermediation. Jurnal Muamalat, 8. pp. 53-76. ISSN 1985-6156 (2015)
Abstract
Financial intermediation cost is a vital element in promoting f inancial deepening in the economy. Realising the importance of net financing margins as a reflection of financial intermediation costs, this article empirically investigates the driving higher f inancial intermediation costs in Islamic banks. Specifically, the analysis is based on key Islamic banking market for 2005-2013 period utilizing Generalized Method of Moments (GMM). The results show that bank size, capital, overhead costs, credit risk and institutional-governance factors are important in explaining Islamic banks’ margins. While, market concentration, inflation and GDP growth have no significant impact on the margins of Islamic banks. The findings reveal important policy implications for reducing the financial intermediation costs of Islamic banks which include operational efficiency, institutional quality, sound risk management and scale efficiency.
| Item Type: | Article |
|---|---|
| Keywords: | Islamic banking, Financial intermediation costs, Margins |
| Taxonomy: | By Niche > Islamic Banking > Banks and Banking > Finance |
| Local Content Hub: | Niche > Islamic Banking |
| Depositing User: | Ilya Nur Fateen Othman |
| Date Deposited: | 15 Jul 2024 02:02 |
| Last Modified: | 15 Jul 2024 02:02 |
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