How Islamic Bank Managing Risk? An Emphasis on Anticipating Financial Crisis

Authors

  • Sebastiana Viphindrartin Department of Economics, Faculty of Economics and Business, Universitas Jember
  • Zainuri Zainuri Department of Economics, Faculty of Economics and Business, Universitas Jember
  • Muhammad Zilmi Anugrah Department of Economics, Faculty of Economics and Business, Universitas Jember

DOI:

https://doi.org/10.26740/al-uqud.v4n2.p208-217

Keywords:

Macroeconomic variable, Financing, SVAR, Pro-cyclical

Abstract

The global economic crisis in 2008 shocked and pressured Indonesian macroeconomic and financial system stability. The decline in macroeconomic stability has an impact on banking policy in lending. Most banks in the world respond to the crisis by doing credit rationing, but how about Islamic bank response toward this condition in Indonesia? Therefore, this study aims to examine the effect of Capital Adequacy Ratio (CAR) and macroeconomic variables on the amount of Islamic banking financing in Indonesia. The method used in this study is the SVAR (Structural Vector Auto Regression) analysis method. The results showed that inflation, capital, and CAR variables had a significant effect on Islamic banks financing amount. In contrast, GDP had no significant impact on Islamic banks financing amount which means that Islamic banking in Indonesia was not implemented pro-cyclical based lending policy.

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Published

2020-07-01

How to Cite

Viphindrartin, S., Zainuri, Z., & Anugrah, M. Z. (2020). How Islamic Bank Managing Risk? An Emphasis on Anticipating Financial Crisis. Al-Uqud : Journal of Islamic Economics, 4(2), 208–217. https://doi.org/10.26740/al-uqud.v4n2.p208-217

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