Browse > Article
http://dx.doi.org/10.13106/jafeb.2021.vol8.no4.0151

Sharia Banking Stability Against Macroeconomic Shocks: A Comparative Analysis in the ASEAN Region  

ZAHRA, Siti Fatimah (Faculty of Economics, Universitas Negeri Jakarta)
MURDAYANTI, Yunika (Faculty of Economics, Universitas Negeri Jakarta)
AMAL, Muhammad Ihlashul (Faculty of Economics, Universitas Negeri Semarang)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.4, 2021 , pp. 151-159 More about this Journal
Abstract
This study aims to compare the level of stability of the Islamic banking system in the ASEAN region, particularly in Indonesia, Malaysia and Brunei Darussalam in the face of macroeconomic turmoil. The data used in this study is secondary data obtained from the official website of the government and banks of each country, with sampling using purposive sampling technique during the period 2013 to 2019. The data analysis method used is panel data using Eviews software. The results showed that the average Z-score value of Islamic banking during the study period in each country was Indonesia (15.61), Malaysia (15.56) and Brunei Darussalam (19.10). The GDP (X1) has a positive effect on the stability of Islamic banking by 54.29%, inflation (X2) has a negative effect of -12.24% on the stability of Islamic banking, and the exchange rate (X3) has a positive effect on the stability of Islamic banking by 42.58%. The findings of this study indicate that the three countries have an average Z-score value that is higher than 2.99, so this shows that Islamic banking in several ASEAN countries is in a stable condition. In addition, a higher GDP and a stronger exchange rate can also encourage a more stable Islamic banking.
Keywords
Islamic Banking; Stability; Macroeconomic; Panel Data;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Hartmann, P., Straetmans, S., & Vries, C. D. (2005). Banking System Stability: A Cross-Atlantic Perspective. Woking Paper Series, 133-88. https://www.ecb.europa.eu
2 Hv, V., Tonby, O., & Thompson, F. (2014). Understanding ASEAN: Seven things you need to know, Retrieved October 30, 2020. https://www.mckinsey.com
3 Ichsan, N. (2012). Analysis of the Stability of Multiple Banking in Indonesia Macroeconomic Variable Shocks: Banking Stability Index Approach (BSI).(Unpublished Thesis). Bogor: STEI Tazkia
4 Ishrakieh, L. M., Dagher, L., & El Hariri, S. (2020). A Financial Stress Index For A Highly Dollarized Developing Country : The Case Of Lebanon. Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, 20(2), 43-52. https://ideas.repec.org/a/tcb/cebare/v20y2020i2p43-52.html
5 Iskenderoglu, O., & Tomak, S. (2013). Competition and Stability: An Analysis of the Turkish Banking System. International Journal of Economics and Financial Issues, 3(3), 72-76. www.econjournals.com
6 Jabeenm, H., & Qureshi, M.N. (2019). Financial Condition Index (FCI) for the Pakistan. Indian Journal of Science and Technology, 12(21), 1-8. https://doi.org/10.17485/ijst/2019/v12i21/144089   DOI
7 Kamaludin, D., & Usman, B. (2015). Determinants of Non Performing Loans (NPL) In the Banking Industry (Empirical Evidence for Companies Going Public on the Indonesian Stock Exchange). Journal of Management Applications (JAM), 13(4), 547-556.
8 Karim, N. A., Al-Habshi, S. M. S. J., & Abduh, M. (2016). Macroeconomics Indicators And Bank Stability: A Case Of Banking In Indonesia. Bulletin of Monetary Economics and Banking, 18(4), 432-448. https://doi.org/10.21098/bemp.v18i4.609   DOI
9 Al-Kharusi, S., & Murthy, S. R. (2020). Journal of Asian Finance, Economics and Business, 7(12), 337-344. https://doi.org/10.13106/jafeb.2020.vol7.no12.337   DOI
10 Ali, M., & Puah, C. (2018). Does Bank Size and Funding Risk Effect Bank's Stability? A Lesson from Pakistan. Global Business Review, 19(5), 1166-1186. https://doi.org/10.1177/0972150918788745   DOI
11 Altaee, H., Talo, I., & Adam, M. (2013). Testing the Financial Stability of Banks in GCC Countries: Pre and Post Financial Crisis. International Journal of Business and Social Research, 3(4), 93-105. https://doi.org/10.18533/ijbsr.v3i4.33   DOI
12 Babar, S., Latief, R., Ashraf, S., & Nawaz, S. (2019). Financial Stability Index for the Financial Sector of Pakistan. Economies, 7, 81-95. https://doi.org/10.3390/economies7030081   DOI
13 Banerjee, S. (2017). A Financial Condition Index for India through Incorporation of Commercial Bank and Other Lending. International Journal of Economics and Financial Issues, 7, 526-529. Retrieved from www.econjournals.com
14 Beck, T., Hesse, H., K. T., & Von Westernhagen, N. (2009). VOX CEPR Policy Portal: Bank Ownership and Stability: Evidence from Germany. Retrieved from https://voxeu.org/article/bank-ownership-and-stability-evidence-germany
15 Borg I., & Brian, M. (2018). Constructing a Financial Condition Index for a Small-Open Economy: The Case of Malta. Research in Applied Economics, Macrothink Institute, 10(3), 89-105. https://ideas.repec.org/a/mth/raee88/v10y2018i3p89-105.html   DOI
16 Bouri, E., Gupta, R., Lau, C. K. M., Roubaud, D., & Wang, S. (2018). Bitcoin And Global Financial Stress: A Copula-Based Approach To Dependence And Causality In The Quantiles. The Quarterly Review of Economics and Finance, 69, 297-307. https://doi.org/10.1016/j.qref.2018.04.003   DOI
17 Karim, N. A., Alhabshi, S. M. S. J., Kassim, S., & Haron, R. (2018). Comparative Analysis of Bank Stability in Indonesia: A NonParametric Approach on Different Banking Models. Journal of Islamic Monetary and Finance, 3(2), 201-219. https://doi.org/10.21098/jimf.v3i2.731   DOI
18 Kocisova, K. (2014). Banking Stability Index: A Cross-Country Study. In: 15th International Conference on Finance and Banking, Praha, Czech Republic: Technical University of Kosice, Faculty of Economics.
19 Koong, S. S., Law, S. H., & Ibrahim, M. H. (2017). Credit expansion and financial stability in Malaysia. Economic Modelling, 61(1), 339-350. https://doi.org/10.1016/j.econmod.2016.10.013   DOI
20 Laeven, L., & Valencia, F. (2018). Systemic Banking Crises Revisited. IMF Working Paper. WP/18/206.
21 Miah, M. D., & Uddin, H. (2017). Efficiency and stability: A Comparative Study Between Islamic And Conventional Banks In GCC Countries. Future Business Journal, 3, 172-185. https://doi.org/10.1016/j.fbj.2017.11.001   DOI
22 Mohammad, A. R, Hidthiir, M. H., & Mat Nor. (2019). Assessing the Effect of Change in Oil Prices, Macroeconomics on the Banking Sector Stability in Oil-Producing Countries. Academic Journal of Economic Studies, 5(4), 88-93. https://ideas.repec.org/a/khe/scajes/v5y2019i4p88-93.html
23 Nachrowi & Usman. (2006). Econometrics Popular and Practical Approaches for Economic and Financial Analysis. Jakarta: Publishing Institute, Faculty of Indonesia.
24 Nizar, N., Albada, A., & Abdul Karim, Z. (2019). A Malaysia Banking Stability Index. International Journal of Accounting, Finance and Business, 4(22), 68-89.
25 Odeduntan, A. K., Adewale, A., & Hamisu, S. (2016). Financial Stability of Islamic Banks: Empirical Evidence. Journal of Islamic Banking and Finance, 4(1), 39-46. https://doi.org/10.10.15640/jibf.v4n1a5   DOI
26 Budi, L. P. G, Kusnendi, K., & Utami, S. A. (2020). The Influence of Inflation, Exchange Rates, CAR and NPF to Stability of Islamic Banks in Indonesia Period 2015-2019. Iqtishoduna: Journal Of Islamic Economics, 9(1), 29-54. https://doi.org/10.36835/iqtishoduna.v9i1.468   DOI
27 Carretta, A., Farina, V., Fiordelisi, F., Schwizer, P., & Stentella, F. S. (2015). Don't Stand So Close to Me: Te Role of Supervisory Style in Banking Stability. Journal of Banking & Finance, 52, 180-188. https://doi.org/10.1016/j.jbankfin.2014.09.015.   DOI
28 Chaibi, H., & Ftiti, Z. (2015). Credit Risk Determinants: Evidence from a Cross Country Study. Research in International Business and Finance, 33, 1-16. https://doi.org/10.1016/j.ribaf.2014.06.001.   DOI
29 Chatterjee, S., Chiu, Wai, C., Hoke, S. H., & Duprey, T. (2017). A Financial Stress Index for the United Kingdom. Bank of England Working Paper No. 697. https://www.bankofengland.co.uk/working-paper/2017/a-financial-stress-index-for-theunited-kingdom
30 Chia, S. Y. (2014). The ASEAN Economic Community: Progress, Challenges, and Prospects. In: Baldwin, R., Kawai, M., & Wignaraja G., (Eds.), A World Trade Organization for the 21st Century, Edward Elgar, Cheltenham, 269-293.
31 Chia, S. Y. (2017). Modalities for ASEAN Economic Integration: Retrospect And Going Forward. The Singapore Economic Review, 62(3), 561-591. https://doi.org/10.1142/S0217590818400015   DOI
32 Cihak, M., & Hesse, H. (2008). Islamic Banks and Financial Stability: An Empirical Analysis, IMF Working Paper, WP/08/16. Washington, D.C.
33 Cihak, M., & Hesse, H. (2010). Islamic Banks and Financial Stability: An Empirical Analysis. Journal of Financial Services Research, 38(3), 95-113. https://doi.org/10.1007/s10693-010-0089-0   DOI
34 Pascual, L. B., Ponce, A. T., & Riportella, C. C. (2015). Factors Influencing Bank Risk in Europe: Evidence from the Financial Crisis. North American Journal of Economics and Finance, 34, 138-166. https://doi.org/10.1016/j.najef.2015.08.004   DOI
35 Petrovska, M., & Mihajlovska, E. M. (2013). Measures of Financial Stability in Macedonia. Journal of Central Banking Theory and Practice, 2(3), 85-110. https://EconPapers.repec.org/RePEc:cbk:journl:v:2:y:2013:i:3:p:85-110
36 Pham, M. H., & Doan, T. P. L. (2020). Journal of Asian Finance, Economics and Business, 7(6), 47-59. https://doi.org/10.13106/jafeb.2020.vol7.no6.047   DOI
37 Popovska, J. (2014). Modelling Financial Stability: The Case of the Banking Sector in Macedonia. Journal of Applied Economics and Business, 2(1), 68-91. http://www.aebjournal.org/article020104.php
38 Rahim, S., & Zakaria, R. (2013). Comparison on Stability Between Islamic and Conventional Banks in Malaysia. Journal of Islamic Economics, Banking and Finance, 9(3), 131-149. https://doi.org/10.12816/0001618   DOI
39 Rajhi, W., & Slim A. H. (2013). Islamic Banks And Financial Stability: A Comparative Empirical Analysis Between Mena And Southeast Asian Countries. Region et Developpement, LEAD, Universite du Sud, 37(1), 149-177. https://EconPapers.repec.org/RePEc:tou:journl:v:37:y:2013:p:149-177
40 Rashid, A., Yousaf, S., & Khaleequzzaman, M. (2017). Does Islamic banking really strengthen financial stability? Empirical evidence from Pakistan. International Journal of Islamic and Middle Eastern Finance and Management, 10(2), 130-148. https://doi.org/10.1108/IMEFM-11-2015-0137   DOI
41 Rizvi, S. A., Narayan, P. K., Sakti, A., & Syarifuddin, F. (2019). Role of Islamic Banks in Indonesian Banking Industry: an Empirical Exploration. Pacific-Basin Finance Journal, 6(2), 1-10. https://doi.org/10.1016/j.pacfin.2019.02.002   DOI
42 De Bock, R., & Demyanets, A. (2012). Bank Asset Quality in Emerging Markets: Determinants and Spillovers. IMF Working Paper Monetary and Capital Markets, WP/12/71.
43 Dienillah, A., Anggraeni, L., & Sahara, S. (2018). Impact of Financial Inclusion on Financial Stability based on Income Group Countries. Bulletin of Monetary Economics and Banking, 20(4), 429-442. https://doi.org/10.21098/bemp.v20i4.859   DOI
44 Gersl, A., & J Hermanek. (2010). Financial Stability Indicators: Advantages and Disadvantages of Their Use in the Assessment of Financial System Stability. Occasional Publication, CNB, 69-79. https://EconPapers.repec.org/RePEc:cnb:ocpubc:fsr06/2
45 Ghosh, A. (2015). Banking-Industry Specifc and Regional Economic Determinants of Non Performing Loans: Evidence from US States. Journal of Financial Stability, 20, 93-104. https://doi.org/10.1016/j.jfs.2015.08.004   DOI
46 Ghosh, S. (2011). A Simple Index of Banking Fragility: Application to Indian Data. Reserve Bank of India, Mumbai, India. The Journal of Risk Finance, 12(2), 112-120. https://doi.org/10.1108/15265941111112839   DOI
47 Guillaumin, C., &, Vallet, G. (2017). Forecasting Inflation In Switzerland After The Crisis: The Usefulness Of A Monetary And Financial Condition Index. Cahier de recherche du Creg. Centre de Recherche en Economie de Grenoble (CREG), 1-30. https://creg.univ-grenoble-alpes.fr/
48 Gurrib, I. (2018). The Relationship between a Unified Financial Condition Index and the Most Actively Traded USD Based Foreign Currency Pairs. Institutions and Economies, 12(4), 93-127. http://dx.doi.org/10.2139/ssrn.3125275   DOI
49 Creel, J., Hubert, P., & Labondance, F. (2015). Financial Stability and Economic Performance. Economic Modelling, 48(1), 25-40. https://doi.org/10.1016/j.econmod.2014.10.025   DOI
50 Sadia, H., Bhatti, A. A., & Ahmad, E. (2019). Developing a Financial Stress Index for Pakistan. Business & Economic Review, 11(4), 113-132. https://doi.org/10.22547/BER/11.4.5   DOI
51 Shim, J. (2019). Loan Portfolio Diversifcation, Market Structure and Bank Stability. Journal of Banking and Finance, 104(1), 103-115. https://doi.org/10.1016/j.jbankfin.2019.04.006   DOI
52 Swamy, V. (2014). Testing The Interrelatedness Of Banking Stability Measures. Journal of Financial Economic Policy, 6(1), 25-45. https://doi.org/10.1108/JFEP-01-2013-0002   DOI
53 Thach, N. N., Oanh, T. T. K., & Chuong, H. N. (2019) Using Confirmation Factor Analysis to Construct a Financial Stability Index for Vietnam. Structural Changes and their Econometric Modeling, 8(8), 289-302. https://doi.org/10.1007/978-3-030-04263-9_22   DOI
54 Kan, I., Saddozai, U. K., Hussain, I., & Rehman, A. (2017). Financial Stability of Islamic Banks: A Case Study of Pakistan. Asian Research Journal of Arts & Social Sciences, 4(4), 1-8. https://doi.org/10.9734/ARJASS/2017/37356   DOI
55 Viphindrartin, S., Margaretha A., Regina N. W., Rafael P. S., & Selvi A. (2021). Journal of Asian Finance, Economics and Business, 8(1), 647-654. https://doi.org/10.13106/jafeb.2021.vol8.no1.647   DOI
56 Zahra, S. F., Ascarya, A., & Huda, N. (2018). Stability Measurement of Dual Banking System in Indonesia: Markov Switching Approach. Al-Iqtishad: Journal of Islamic Economics, 10(1), 25-52. https://doi.org/10.15408/aiq.v10i1.5867   DOI
57 Abrar, T., Ahmed F., & Kashif, M. (2018). Financial Stability of Islamic Versus Conventional Banks in Pakistan. Al-Iqtishad: Journal of Islamic Economics, 10(2), 341-366. https://doi.org/10.15408/aiq.v10i2.6500   DOI