Why do Indonesian Islamic Banks Take the Risk?: The Case of Two Major Islamic Banks
<p>This study aims to analyze the effect of bank size, deposit guarantee system, number of competitors, leverage, and bank age on the risk-takingbehavior of Islamic banks in Indonesia at the period of 2001-2016. Risk taking is projected to Financing to Asset Ratio (FAR). The deposit guarantee...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Universitas Muhammadiyah Yogyakarta
2019-01-01
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| Series: | International Journal of Islamic Economics and Finance |
| Subjects: | |
| Online Access: | https://journal.umy.ac.id/index.php/ijief/article/view/5484 |
| _version_ | 1819227344184803328 |
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| author | Yaser Taufik Syamlan Ar Rizal Azinuddin |
| author_facet | Yaser Taufik Syamlan Ar Rizal Azinuddin |
| author_sort | Yaser Taufik Syamlan |
| collection | DOAJ |
| description | <p>This study aims to analyze the effect of bank size, deposit guarantee system, number of competitors, leverage, and bank age on the risk-takingbehavior of Islamic banks in Indonesia at the period of 2001-2016. Risk taking is projected to Financing to Asset Ratio (FAR). The deposit guarantee system is proxiedby deposit guarantee using a dummy variable. The number of competitors is proxiedby the market value of Islamic Banking. Leverage is proxiedbythe total of third party funds. Bank Age is proxiedby bank age according to the 2001-2016 period of study. This study uses secondary data from published financial reports and uses panel data regression methods. The samples are two pioneers of Islamic Bank in Indonesia, namely Bank Muamalat Indonesia and Bank SyariahMandiri. The results of this study show that Bank Size has a positive effect on risk taking. As a result also applies to the number of competitors and Bank Age. Only Deposit Insurance variable that has a positive but not significant influence and Leverage variable has the significant negative effect. In conclusions, the Islamicbank takes the risk due to the tight competition, the age of bank, the amount of third party fund collected and the asset of the bank.</p> |
| first_indexed | 2024-12-23T10:39:53Z |
| format | Article |
| id | doaj.art-6301169e61d3448f8cb9368a2834bd7c |
| institution | Directory Open Access Journal |
| issn | 2622-3562 2622-4372 |
| language | English |
| last_indexed | 2024-12-23T10:39:53Z |
| publishDate | 2019-01-01 |
| publisher | Universitas Muhammadiyah Yogyakarta |
| record_format | Article |
| series | International Journal of Islamic Economics and Finance |
| spelling | doaj.art-6301169e61d3448f8cb9368a2834bd7c2022-12-21T17:50:11ZengUniversitas Muhammadiyah YogyakartaInternational Journal of Islamic Economics and Finance2622-35622622-43722019-01-01121872083147Why do Indonesian Islamic Banks Take the Risk?: The Case of Two Major Islamic BanksYaser Taufik Syamlan0Ar Rizal AzinuddinSTEI Tazkia Sentul Bogor<p>This study aims to analyze the effect of bank size, deposit guarantee system, number of competitors, leverage, and bank age on the risk-takingbehavior of Islamic banks in Indonesia at the period of 2001-2016. Risk taking is projected to Financing to Asset Ratio (FAR). The deposit guarantee system is proxiedby deposit guarantee using a dummy variable. The number of competitors is proxiedby the market value of Islamic Banking. Leverage is proxiedbythe total of third party funds. Bank Age is proxiedby bank age according to the 2001-2016 period of study. This study uses secondary data from published financial reports and uses panel data regression methods. The samples are two pioneers of Islamic Bank in Indonesia, namely Bank Muamalat Indonesia and Bank SyariahMandiri. The results of this study show that Bank Size has a positive effect on risk taking. As a result also applies to the number of competitors and Bank Age. Only Deposit Insurance variable that has a positive but not significant influence and Leverage variable has the significant negative effect. In conclusions, the Islamicbank takes the risk due to the tight competition, the age of bank, the amount of third party fund collected and the asset of the bank.</p>https://journal.umy.ac.id/index.php/ijief/article/view/5484risk taking, islamic banking, bank size, leverage, deposit insurance |
| spellingShingle | Yaser Taufik Syamlan Ar Rizal Azinuddin Why do Indonesian Islamic Banks Take the Risk?: The Case of Two Major Islamic Banks International Journal of Islamic Economics and Finance risk taking, islamic banking, bank size, leverage, deposit insurance |
| title | Why do Indonesian Islamic Banks Take the Risk?: The Case of Two Major Islamic Banks |
| title_full | Why do Indonesian Islamic Banks Take the Risk?: The Case of Two Major Islamic Banks |
| title_fullStr | Why do Indonesian Islamic Banks Take the Risk?: The Case of Two Major Islamic Banks |
| title_full_unstemmed | Why do Indonesian Islamic Banks Take the Risk?: The Case of Two Major Islamic Banks |
| title_short | Why do Indonesian Islamic Banks Take the Risk?: The Case of Two Major Islamic Banks |
| title_sort | why do indonesian islamic banks take the risk the case of two major islamic banks |
| topic | risk taking, islamic banking, bank size, leverage, deposit insurance |
| url | https://journal.umy.ac.id/index.php/ijief/article/view/5484 |
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