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Growing Science » Uncertain Supply Chain Management » Systematic and unsystematic determinants of liquidity risk in the Islamic banks in the middle east

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Uncertain Supply Chain Management

ISSN 2291-6830 (Online) - ISSN 2291-6822 (Print)
Quarterly Publication
Volume 12 Issue 3 pp. 1399-1408 , 2024

Systematic and unsystematic determinants of liquidity risk in the Islamic banks in the middle east Pages 1399-1408 Right click to download the paper Download PDF

Authors: Abdalla Mohammad khalaf Al Badarin, Mefleh Faisal Mefleh Al-Jarrah, Adnan Mohamad Yosef Rababah, Amer Yosef Mohammad ALotoom

DOI: 10.5267/j.uscm.2024.4.011

Keywords: Banking, Economics, Business, Management and Accounting, Liquidity Risk, Islamic Banks, Bank-specific and Macroeconomic

Abstract: Liquidity risk (LR) is a concern in Islamic banks and may lead to major problems if not managed appropriately and planned, due to the lack of external liquidity sources for Islamic banks. However, the purpose of this article is to look at the factors that affect liquidity risk in Middle Eastern Islamic banks. To arrive at a substantial and compelling conclusion, the cross-sectional data from 30 Islamic banks was gathered between 2011 and 2022. The random effect regression model, GMM, and fixed effect regression model were all utilized. According to the report, Islamic banks in the Middle East have safe levels of liquidity. It also demonstrates how the financing-to-deposit ratio, inflation, economic growth, and return on assets all have a favorable impact on Islamic banks' liquidity risks. Furthermore, the study discovered that non-performing financing, capital sufficiency, operational effectiveness, and scale had no bearing on the liquidity issues associated with Islamic banks. This paper provided guidance regarding liquidity risk management procedures and systems in Islamic banks in order to design banking liquidity risk management policies. To avoid liquidity risks in Islamic banks, the optimal level of financing to deposit ratio must be determined, maintaining the quality of financing, reducing the non-performing loan ratio to the lowest possible level, and enabling Islamic banks to benefit from the central bank as a last resort for liquidity.


How to cite this paper
Badarin, A., Al-Jarrah, M., Rababah, A & ALotoom, A. (2024). Systematic and unsystematic determinants of liquidity risk in the Islamic banks in the middle east.Uncertain Supply Chain Management, 12(3), 1399-1408.

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Journal: Uncertain Supply Chain Management | Year: 2024 | Volume: 12 | Issue: 3 | Views: 845 | Reviews: 0

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