Liquidity Risk Management in Islamic Banking Institutions: A Comparative Study between Malaysia and Pakistan

Authors

  • Majid Iqbal Doctoral Candidate, International Islamic University, Islamabad
  • Dr. Hafiz Muhammad Hassan PhD Islamic Studied, University of Sargodha, Sargodha

Abstract

This study compares the liquidity risk management between IBI’s of Malaysia and Pakistan. An investigative approach was taken to know about the significance of ROA, ROE, CAR, SOB, and NWC with liquidity risk management of both countries. The data is collected for the period of 2010-2016 from secondary sources. The results are derived using descriptive, correlation and regression analysis. The results explained that there is a positive and insignificant relationship of ROE of IB’s of Malaysia and NWC of IB’s of Pakistan with liquidity risk. Also it shows that there is negative and insignificant relationship of CAR with liquidity risk in model1 but significant in model 2. SOB is negative but significant in IB’s of Malaysia but insignificant in IB’s of Pakistan. ROA of IB’s of Pakistan is positive and insignificant but negative and insignificant in IB’s of Malaysia. ROE of model 2 is negative but insignificant.

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Published

2023-01-17