The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey
This paper examines the empirical behavior of conventional bank deposit rates and the rate of return on retail Islamic profit-and-loss sharing (PLS) investment accounts in Malaysia and Turkey, using monthly data from January 1997 to August 2010. The analysis shows that conventional bank deposit rat...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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EconJournals
2014-12-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://econjournals.com/index.php/ijefi/article/view/845 |
| _version_ | 1797911695673262080 |
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| author | Serhan Cevik Joshua Charap |
| author_facet | Serhan Cevik Joshua Charap |
| author_sort | Serhan Cevik |
| collection | DOAJ |
| description |
This paper examines the empirical behavior of conventional bank deposit rates and the rate of return on retail Islamic profit-and-loss sharing (PLS) investment accounts in Malaysia and Turkey, using monthly data from January 1997 to August 2010. The analysis shows that conventional bank deposit rates and PLS returns exhibit long-run cointegration and the time-varying volatility of conventional bank deposit rates and PLS returns is correlated and is statistically significant. The pairwise and multivariate causality tests show that conventional bank deposit rates Granger cause returns on PLS accounts. These findings have policy implications in terms of price stability and financial stability.
Keywords: Interest rates; Islamic banks; causality; time-varying volatility correlation
JEL Classifications: E42; E43; E49; F59; G14; G15; O16
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| first_indexed | 2024-04-10T11:44:43Z |
| format | Article |
| id | doaj.art-14eafd9ae36b4e8b87c1f482f47b8946 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T11:44:43Z |
| publishDate | 2014-12-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-14eafd9ae36b4e8b87c1f482f47b89462023-02-15T16:17:22ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382014-12-0151The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and TurkeySerhan Cevik0Joshua Charap1International Monetary FundInternational Monetary Fund This paper examines the empirical behavior of conventional bank deposit rates and the rate of return on retail Islamic profit-and-loss sharing (PLS) investment accounts in Malaysia and Turkey, using monthly data from January 1997 to August 2010. The analysis shows that conventional bank deposit rates and PLS returns exhibit long-run cointegration and the time-varying volatility of conventional bank deposit rates and PLS returns is correlated and is statistically significant. The pairwise and multivariate causality tests show that conventional bank deposit rates Granger cause returns on PLS accounts. These findings have policy implications in terms of price stability and financial stability. Keywords: Interest rates; Islamic banks; causality; time-varying volatility correlation JEL Classifications: E42; E43; E49; F59; G14; G15; O16 https://econjournals.com/index.php/ijefi/article/view/845 |
| spellingShingle | Serhan Cevik Joshua Charap The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey International Journal of Economics and Financial Issues |
| title | The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey |
| title_full | The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey |
| title_fullStr | The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey |
| title_full_unstemmed | The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey |
| title_short | The Behavior of Conventional and Islamic Bank Deposit Returns in Malaysia and Turkey |
| title_sort | behavior of conventional and islamic bank deposit returns in malaysia and turkey |
| url | https://econjournals.com/index.php/ijefi/article/view/845 |
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