Liquidity risk: Comparison between Islamic and conventional banking

Abstract

The purpose of this study is to analyze the influence of micro-economy or bank-specific to the liquidity risk in Islamic and conventional banks. The data in this study using secondary data consists of 20 Islamic banks and 12 conventional banks obtained from seven countries, namely Albania, Saudi Arabia, Bahrain, Malaysia, Dubai, Qatar and Indonesia from 2009 to 2015. This research method is based on quantitative techniques using panel data regression. The results showed that in the Islamic and conventional bank found the best model is the fixed effect model. The variables that affect the liquidity risk in Islamic banks are the CAR, FEXP, FLP and NPF. While the variables that affect liquidity risk in conventional banks are FEXP, FLP, NPL and ROA. In Islamic banking NIM, ROA and SIZE does not affect the liquidity risk, and CAR, NIM and SIZE not affect the liquidity risk in Conventional banks.