Does cost efficiency affect liquidity risk in banking? Evidence from selected OIC countries. Jurnal Ekonomi Malaysia, 51 (2). pp. 47-62. ISSN 0127-1962
Abstract
Cost efficiency plays a significant role in bank risk taking behaviour. This paper examines the effect of cost efficiency on the liquidity risk of Islamic banks and conventional banks in 16 OIC countries from 1999 to 2013. The findings suggest that cost efficiency has a positive effect on liquidity risk. Other significant factors of liquidity risk include capital, bank specialization, credit risk, profitability, size, GDP and inflation whereas market concentration is not significant contributor to banking liquidity risk. There is weak evidence to support the notion that Islamic banks have higher level of liquidity risk than conventional banks. The findings imply the need to provide liquidity, probably through a well-functioning money market to lower liquidity risk in banking.
| Item Type: | Article |
|---|---|
| Keywords: | Islamic banking, Liquidity risk, Cost efficiency |
| Taxonomy: | By Niche > Islamic Banking > Banks and Banking > Finance |
| Local Content Hub: | Niche > Islamic Banking |
| Depositing User: | Ilya Nur Fateen Othman |
| Date Deposited: | 30 Sep 2024 02:19 |
| Last Modified: | 30 Sep 2024 02:19 |
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