Authors:
Teguh Santoso
;
Ari Tjahjawandita
and
Achmad Kemal Hidayat
Affiliation:
Center for Economics and Development Studies and Department of Economics Universitas Padjadjaran, Indonesia
Keyword(s):
Stability, Q-Index, Islamic Banks, Panel Data.
Abstract:
Islamic banks are characterized by the compliance to Islamic laws and practices, the main ones being the prohibition of interest, loan trading and derivative. Globally, during 2008-2009 financial crisis, when a large number of conventional have announced insolvency, no single Islamic bank has been reported. Therefore, a method of measurement the stability of Indonesian Islamic banks is required. This paper has three goals, the first is to measure Indonesian Islamic bank’s stability. The second is to compare the stability between the large bank and the small one. The last, is to see the factors that influence the stability. In this study, Q-Index will be utilized to measure of Islamic banks stability. This index has a flexibility in determining the value of index itself which taking account for dimension of pressure, efficiency, and intermediation. The data sample in this study include 10 Indonesian Islamic banks. Based on the amount of bank asset, there are 5 large Islamic banks and
5 the small one. The result of Q-Index has shown that 8 banks out of 10 banks had experienced period of crisis (unstable). Using test equality of mean that the large Islamic banks are less stable than the small one. Some indicators econometrically can explain stability of Islamic banks, there are ratio financing to asset, cost to income ratio, non-performing financing, return on asset and capital adequacy ratio. However, the findings impact of capital adequacy ratio necessary further study due to no deal with economics and financial concept.
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