Using CAMEL To Predict Management Behavior In Indonesia’s Sharia Bank

Abstract

All of the sharia Bank in Indonesia should met the CAMEL criteria that have been used by Central Bank in Indonesia. CAMEL itself stands for Capital, Asset, Management, Earning and Liquidity. The purpose of this research is to see whether CAMEL able to predict management behavior in sharia bank in Indonesia. The model itself is based on Grange Causality which is introduced by Berger & DeYoung (1997) and then later used by Reddy (2011) to observe banking management behaviour in India. Based on the research, we found that sharia bank in Indonesia experienced a bad management hypothesis.