Liquidity and bank risk-taking in MENA region: analysis of Islamic and conventional banks
The effects of 2007-2008 global financial crisis that had been triggered by liquidity risk, loan concentration and default has resulted to the introduction of liquidity standards in Basel III which require banks to hold more high-quality liquid assets. MENA region which recorded high influx of liqui...
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my-uum-etd.103892023-03-07T02:07:35Z Liquidity and bank risk-taking in MENA region: analysis of Islamic and conventional banks 2019 Mairafi, Salihu Liman Hassan, Sallahuddin Mohamed Arshad, Shamsul Bahrain School of Economics, Finance & Banking School of Economics, Finance & Banking HG Finance The effects of 2007-2008 global financial crisis that had been triggered by liquidity risk, loan concentration and default has resulted to the introduction of liquidity standards in Basel III which require banks to hold more high-quality liquid assets. MENA region which recorded high influx of liquidity during the crisis is faced with inadequate and low rated liquid assets instruments. As a result, banks in the MENA region are vulnerable to high loan concentration in oil sector, non-performing loans and incessant insolvency. This thesis assesses the impact of liquidity on bank risk-taking in MENA region during the period 2005-2017. Also, the study compares the effects between Islamic and conventional banks, banks in gulf cooperation council and nongulf cooperation council countries, and during the financial crisis. The research hypotheses are tested using fixed-effects and system-GMM on three proxies of bank risk-taking namely standard deviation of return on equity, standard deviation of return on assets and Z-SCORE. The results show that funding liquidity, liquidity risk, and loans have significant effects on bank risk-taking in MENA region. Findings also disclose that liquidity risk and loans have significant impact on Islamic banks risktaking while funding liquidity has significant effect on conventional banks risk-taking. In addition, the outcomes reveal that loans significantly influence bank risk-taking in gulf cooperation council whereas funding liquidity, liquidity risk, and loans significantly influence banks in non-gulf cooperation council. Lastly, the results show that the global financial crisis significantly affects MENA banks risk-taking. These findings imply that bank risk-taking varies with peculiarities of banks, countries, and macroeconomic situation. In line with the findings, the implications could be suggested for the ongoing regulations on implementation of higher liquidity requirements for all category of banks across the globe. 2019 Thesis https://etd.uum.edu.my/10389/ https://etd.uum.edu.my/10389/1/depositpermission_s900782.pdf text eng staffonly https://etd.uum.edu.my/10389/2/s900782_01.pdf text eng public other doctoral Universiti Utara Malaysia |
| institution |
Universiti Utara Malaysia |
| collection |
UUM ETD |
| language |
eng eng |
| advisor |
Hassan, Sallahuddin Mohamed Arshad, Shamsul Bahrain |
| topic |
HG Finance |
| spellingShingle |
HG Finance Mairafi, Salihu Liman Liquidity and bank risk-taking in MENA region: analysis of Islamic and conventional banks |
| description |
The effects of 2007-2008 global financial crisis that had been triggered by liquidity risk, loan concentration and default has resulted to the introduction of liquidity standards in Basel III which require banks to hold more high-quality liquid assets. MENA region which recorded high influx of liquidity during the crisis is faced with inadequate and low rated liquid assets instruments. As a result, banks in the MENA region are vulnerable to high loan concentration in oil sector, non-performing loans and incessant insolvency. This thesis assesses the impact of liquidity on bank risk-taking in MENA region during the period 2005-2017. Also, the study compares the effects between Islamic and conventional banks, banks in gulf cooperation council and nongulf cooperation council countries, and during the financial crisis. The research hypotheses are tested using fixed-effects and system-GMM on three proxies of bank risk-taking namely standard deviation of return on equity, standard deviation of return on assets and Z-SCORE. The results show that funding liquidity, liquidity risk, and loans have significant effects on bank risk-taking in MENA region. Findings also disclose that liquidity risk and loans have significant impact on Islamic banks risktaking while funding liquidity has significant effect on conventional banks risk-taking. In addition, the outcomes reveal that loans significantly influence bank risk-taking in gulf cooperation council whereas funding liquidity, liquidity risk, and loans significantly influence banks in non-gulf cooperation council. Lastly, the results show that the global financial crisis significantly affects MENA banks risk-taking. These findings imply that bank risk-taking varies with peculiarities of banks, countries, and macroeconomic situation. In line with the findings, the implications could be suggested for the ongoing regulations on implementation of higher liquidity requirements for all category of banks across the globe. |
| format |
Thesis |
| qualification_name |
other |
| qualification_level |
Doctorate |
| author |
Mairafi, Salihu Liman |
| author_facet |
Mairafi, Salihu Liman |
| author_sort |
Mairafi, Salihu Liman |
| title |
Liquidity and bank risk-taking in MENA region: analysis of Islamic and conventional banks |
| title_short |
Liquidity and bank risk-taking in MENA region: analysis of Islamic and conventional banks |
| title_full |
Liquidity and bank risk-taking in MENA region: analysis of Islamic and conventional banks |
| title_fullStr |
Liquidity and bank risk-taking in MENA region: analysis of Islamic and conventional banks |
| title_full_unstemmed |
Liquidity and bank risk-taking in MENA region: analysis of Islamic and conventional banks |
| title_sort |
liquidity and bank risk-taking in mena region: analysis of islamic and conventional banks |
| granting_institution |
Universiti Utara Malaysia |
| granting_department |
School of Economics, Finance & Banking |
| publishDate |
2019 |
| url |
https://etd.uum.edu.my/10389/1/depositpermission_s900782.pdf https://etd.uum.edu.my/10389/2/s900782_01.pdf |
| _version_ |
1776103806248943616 |