2015
DOI: 10.5089/9781513588513.001
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Monetary Operations and Islamic Banking in the GCC: Challenges and Options

Abstract: The assessment provides evidence of market segmentation across Islamic and conventional banks in the Gulf Cooperation Council (GCC), leading to excess liquidity, and an uneven playing field for Islamic banks that might affect their growth. Liquidiy management has been a long-standing concern in the global Islamic finance industry as there is a general lack of Shari'ah compliant instruments than can serve as high-quality short-term liquid assets. The degree of segmentation and bank behavior varies across countr… Show more

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Cited by 16 publications
(8 citation statements)
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“…IB's asset is more liquid than CB's as represented by CTA. This result confirms hypothesis H2, which is consistent with Basu et al .’s (2015) findings. However, CB has the better CTD ratio, indicating that compared to IB, CB asset has more cash than its customer deposit.Contrary to hypothesis H3, IBs carry higher credit risk compared to CBs.…”
Section: Regression Findingssupporting
confidence: 93%
“…IB's asset is more liquid than CB's as represented by CTA. This result confirms hypothesis H2, which is consistent with Basu et al .’s (2015) findings. However, CB has the better CTD ratio, indicating that compared to IB, CB asset has more cash than its customer deposit.Contrary to hypothesis H3, IBs carry higher credit risk compared to CBs.…”
Section: Regression Findingssupporting
confidence: 93%
“…As Islamic banks perform maturity transformation functions, they are liquidity creation distributors. In this context, Basu et al (2015) state that investment deposits in Islamic banks usually have maturities of 12 months, while Musharaka and Mudaraba are long-term investments. According to Beck et al (2010), academics and policymakers "alike point to the advantages of Sharia-compliant financial products, as the mismatch of short-term, on-sight demandable deposit contracts with long-term uncertain loan contracts is mitigated with equity and risk-sharing elements."…”
Section: Islamic Bank Intermediation and Money Creationmentioning
confidence: 99%
“…Hal lain yang juga menjadi perhatian bersama adalah terkait masih kurangnya instrumen moneter berbasis syariah bisa memenuhi kebutuhan likuiditas perbankan syariah. (Basu et al, 2015) dari organisasi International Monetary Fund (IMF) telah mengkonfirmasi kondisi tersebut dalam kajian mereka terhadap negara-negara di kawasan Teluk, anggota dari GCC (Gulf Cooperation Council). Di setiap negara berbeda kondisi tergantung pada tingkat permisivitas serta ketersediaan instrumen berbasis syariah.…”
Section: Diskusiunclassified