Universiti Teknologi Malaysia Institutional Repository

The good and bad news about the new liquidity rules of Basel III in Islamic banking of Malaysia

Mohamed Zainudin, Shazleena and Abdul Rasid, Siti Zaleha and Omar, Rosmini and Hassan, Rohail (2019) The good and bad news about the new liquidity rules of Basel III in Islamic banking of Malaysia. Journal of Risk and Financial Management, 12 (3). p. 120. ISSN 1911-8066

Full text not available from this repository.

Official URL: http://dx.doi.org/10.3390/jrfm12030120


How has Basel III (Bank for International Settlements), regarding the computation, measurement, and management of the liquidity coverage ratio (LCR), vitalized the Islamic banking sector in emerging economies? Vice versa, what is the Islamic banking sector’s capacity to respond in embracing Basel III? This study aims to review the current issues faced by a bank as it discusses the current regulatory guidelines and operational challenges in implementing the system. Based on the implementation of LCR preliminary secondary data of Malaysian banks between 2010 and 2016, this study finds that the readiness of LCR system implementation in the Islamic banking industry is currently low because LCR is still relatively new for all financial institutions and vendors. There is a huge gap between the present system infrastructure of the banks and the LCR model requirements as defined by BNM (Bank Negara Malaysia) under Basel III. Nevertheless, this finding opens new horizons of understanding and practically offers further investigations for the whole banking sector in Malaysia. Thus, policy makers, regulators, and industry players should utilize a unique framework for Islamic banks when strategizing liquidity risk management.

Item Type:Article
Uncontrolled Keywords:Islamic banking Malaysia, risk management
Subjects:H Social Sciences > HG Finance
Divisions:International Business School
ID Code:87710
Deposited By: Widya Wahid
Deposited On:30 Nov 2020 21:09
Last Modified:30 Nov 2020 21:09

Repository Staff Only: item control page