Liquidity Risk of Islamic Banks in Indonesia

DOI

10.2991/icobame-18.2019.7How to use a DOI?

Keywords

Islamic bank; liquidity risk; capital adequacy; assets quality; third-party funds; profitability

Abstract

The main aim of this paper is to investigate the factors that influence the liquidity risk of Islamic banks in Indonesia. The topic of Islamic banking liquidity risk is interesting because Islamic banks run based on the principle of profits sharing as well as third-party funds that are managed using wadi’ah and investment agreement, placing Islamic banks at a higher liquidity risk than conventional banks. We employed data from 13 Islamic banks in 2010-2016. We use multiple linear regression method in investigating the relationship between liquidity risk, capital adequacy, assets quality, third-party funds, and profitability. The results indicate that capital adequacy, asset quality, and third-party funds have a significant effect on banks liquidity risk. Meanwhile, profitability does not effect on liquidity risk of the banks.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Download article (PDF)

TY  - CONF
AU  - Dwi Irawati
AU  - Intan Puspitasari
PY  - 2019/07
DA  - 2019/07
TI  - Liquidity Risk of Islamic Banks in Indonesia
BT  - Proceedings of the International Conference on Banking, Accounting, Management, and Economics (ICOBAME 2018)
PB  - Atlantis Press
SP  - 34
EP  - 37
SN  - 2352-5428
UR  - https://doi.org/10.2991/icobame-18.2019.7
DO  - 10.2991/icobame-18.2019.7
ID  - Irawati2019/07
ER  -