Global Finance Journal_April_2019_rev -FINAL_27_04_2019.pdf (1.34 MB)
The bank lending channel in the Malaysian Islamic and conventional banking system
journal contribution
posted on 2023-06-09, 17:55 authored by Guglielmo Maria Caporale, Abdurrahman Nazif Catik, Mohamad Husam Helmi, Faek Menla AliFaek Menla Ali, Mohammad TajikThis paper examines the bank lending channel of monetary transmission in Malaysia, a country with a dual banking system including both Islamic and conventional banks, over the period 1994:01-2015:06. A two-regime threshold vector autoregression (TVAR) model is estimated to take into account possible nonlinearities in the relationship between bank lending and monetary policy under different economic conditions. The results indicate that Islamic credit is less responsive than conventional credit to interest rate shocks in both the high and low growth regimes; however, the sub-sample estimation shows that its response has increased in more recent years becoming quite similar to that of conventional credit. Moreover, the relative importance of Islamic credit shocks in driving output growth is notable in the low growth regime, their effects being positive. These findings can be interpreted in terms of the distinctive features of Islamic banks.
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- Published
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- Accepted version
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Global Finance JournalISSN
1044-0283Publisher
ElsevierExternal DOI
Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2019-05-28First Open Access (FOA) Date
2019-06-10First Compliant Deposit (FCD) Date
2019-05-26Usage metrics
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