This research aims at detecting early indicators that cause conventional banking and Islamic banking crises, identifying the longest crisis period for both types of banks, and comparing the stability between the two kinds of banks. The method used is the Markov Switching Vector Autoregressive (MS-VAR) approach. This study uses secondary data obtained from official sources and in monthly form from January 2004 to March 2017. The results show that Islamic banking is more stable against internal and external shocks than conventional banking. Z-score for Islamic banking is higher (11,933) than the Z-score for conventional banking (11,679). The longest crisis period for conventional banking was around April 2013 – March 2017 while for Islamic banking was around January 2008 – October 2008.
Sharia financial literacy and financial inclusion in indonesia are still in the lower level, Indonesian’s Financial Services Authority launched in 2016 that the data of sharia financial literacy is about 8.11% and sharia financial inclusion only about 11.06%. The easiness of access against sharia financial products and services are the main factors that caused both are still in the lower level. In case of enhancement of society knowledge and access needs the innovation to simplify the utilization of sharia financial products and services. One of the best innovation must be developed by Sharia Financial Institution is digitalization.The digitalization will affect the increase of sharia financial literacy and inclusion index, because this era is an open public information, most people now are easy to access the internet and also the smartphone users in Indonesia are increasing every year. So this is an opportunity for Sharia Financial Institution to combine their products and services with the latest technology. The author makes a digital innovation solution to accommodate these opportunities, named "Connected, One Stop Solution" which are 20 features that can be enjoyed by all segments of society. In addition, the 20 features are adapted to sharia rules which refer to maqashid sharia.
This study aims to examine the cyclical instability of Islamic banking in Indonesia, Malaysia, and Pakistan. A stable Islamic banking system can give the public confidence to conduct transactions and thus grow the economy. The proxy variable for stability used is the z-score, with 156 periods of research data from January 2007 to December 2019. The Markov Switching Vector Autoregression (MS-VAR) method was employed. The results show that Islamic banking stability in Indonesia based on the z-score is more stable than others. Nevertheless, in terms of the regression of all the variables, regime shifting, and the duration of the crisis, overall Malaysian Islamic banking displays the best performance. The instability of the Indonesian model is mostly affected by inflation, whereas Malaysia and Pakistan are affected by the financing to deposit ratio and the fluctuation in global oil, respectively.
Penelitian ini bertujuan untuk mendeteksi indikator dini penyebab krisis perbankan konvensional dan perbankan syariah, mengidentifikasi periode terpanjang gejolak antara kedua perbankan serta membandingkan stabilitas antara keduanya. Metode yang digunakan yaitu pendekatan Markov Switching Vector Autoregressive (MS-VAR), dimana kelebihan pendekatan ini adalah nilai batas indeks krisis (threshold) merupakan variabel endogenous dengan kata lain periode distress dan lamanya gejolak merupakan bagian dari hasil estimasi. Leading indikator mikro untuk perbankan konvensional adalah cash ratio dan leading indicator makro untuk perbankan konvensional adalah interest rate. Sedangkan leading indikator mikro untuk perbankan syariah yaitu bank deposit dan cash ratio serta leading indicator makro untuk perbankan syariah yaitu interest rate, inflasi, kredit domestik, money supply dan current account/gdp. Z-score perbankan konvensional lebih tinggi (10.98) dari Z-score perbankan syariah (9.93) artinya secara umum perbankan konvensional lebih stabil dari perbankan syariah. Namun periode gejolak dialami perbankan konvensional yaitu sekitar Oktober 2014 – Januari 2016 sedangkan periode gejolak perbankan syariah sekitar Januari 2008 – Desember 2008.
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