Maturity Transformation Risk Factors in Islamic Banking: An Implication of Basel III Liquidity Regulations

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Factors in Islamic Banking: An Implication of Basel III Liquidity Regulations </title> <meta name="description" content="Maturity Transformation Risk Factors in Islamic Banking: An Implication of Basel III Liquidity Regulations "> <meta name="keywords" content="Basel III, Islamic banking, maturity transformation risk, net stable funding ratio"> <meta name="viewport" content="width=device-width, initial-scale=1, minimum-scale=1, maximum-scale=1, user-scalable=no"> <meta charset="utf-8"> <link href="https://cdn.waset.org/favicon.ico" type="image/x-icon" rel="shortcut icon"> <link href="https://cdn.waset.org/static/plugins/bootstrap-4.2.1/css/bootstrap.min.css" rel="stylesheet"> <link href="https://cdn.waset.org/static/plugins/fontawesome/css/all.min.css" rel="stylesheet"> <link href="https://cdn.waset.org/static/css/site.css?v=150220211555" rel="stylesheet"> </head> <body> <header> <div class="container"> <nav class="navbar navbar-expand-lg navbar-light"> <a class="navbar-brand" 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</div> <div class="card publication-listing mt-3 mb-3"> <h5 class="card-header" style="font-size:.9rem">Maturity Transformation Risk Factors in Islamic Banking: An Implication of Basel III Liquidity Regulations </h5> <div class="card-body"> <p class="card-text"><strong>Authors:</strong> <a href="https://publications.waset.org/abstracts/search?q=Haroon%20Mahmood">Haroon Mahmood</a>, <a href="https://publications.waset.org/abstracts/search?q=Christopher%20Gan"> Christopher Gan</a>, <a href="https://publications.waset.org/abstracts/search?q=Cuong%20Nguyen"> Cuong Nguyen</a> </p> <p class="card-text"><strong>Abstract:</strong></p> Maturity transformation risk is highlighted as one of the major causes of recent global financial crisis. Basel III has proposed new liquidity regulations for transformation function of banks and hence to monitor this risk. Specifically, net stable funding ratio (NSFR) is introduced to enhance medium- and long-term resilience against liquidity shocks. Islamic banking is widely accepted in many parts of the world and contributes to a significant portion of the financial sector in many countries. Using a dataset of 68 fully fledged Islamic banks from 11 different countries, over a period from 2005 – 2014, this study has attempted to analyze various factors that may significantly affect the maturity transformation risk in these banks. We utilize 2-step system GMM estimation technique on unbalanced panel and find bank capital, credit risk, financing, size and market power are most significant among the bank specific factors. Also, gross domestic product and inflation are the significant macro-economic factors influencing this risk. However, bank profitability, asset efficiency, and income diversity are found insignificant in determining the maturity transformation risk in Islamic banking model. <iframe src="https://publications.waset.org/abstracts/57335.pdf" style="width:100%; height:400px;" frameborder="0"></iframe> <p class="card-text"><strong>Keywords:</strong> <a href="https://publications.waset.org/abstracts/search?q=Basel%20III" title="Basel III">Basel III</a>, <a href="https://publications.waset.org/abstracts/search?q=Islamic%20banking" title=" Islamic banking"> Islamic banking</a>, <a href="https://publications.waset.org/abstracts/search?q=maturity%20transformation%20risk" title=" maturity transformation risk"> maturity transformation risk</a>, <a href="https://publications.waset.org/abstracts/search?q=net%20stable%20funding%20ratio" title=" net stable funding ratio"> net stable funding ratio</a> </p> <a href="https://publications.waset.org/abstracts/57335/maturity-transformation-risk-factors-in-islamic-banking-an-implication-of-basel-iii-liquidity-regulations" class="btn btn-primary btn-sm">Procedia</a> <a href="https://publications.waset.org/abstracts/57335.pdf" target="_blank" class="btn btn-primary btn-sm">PDF</a> <span class="bg-info text-light px-1 py-1 float-right rounded"> Downloads <span class="badge badge-light">416</span> </span> </div> </div> </div> </main> <footer> <div id="infolinks" class="pt-3 pb-2"> <div class="container"> <div style="background-color:#f5f5f5;" class="p-3"> <div class="row"> <div class="col-md-2"> <ul class="list-unstyled"> About <li><a href="https://waset.org/page/support">About Us</a></li> <li><a href="https://waset.org/page/support#legal-information">Legal</a></li> <li><a target="_blank" rel="nofollow" href="https://publications.waset.org/static/files/WASET-16th-foundational-anniversary.pdf">WASET celebrates its 16th foundational 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Maturity Transformation Risk Factors in Islamic Banking: An Implication of Basel III Liquidity Regulations