Financial Stability in Islamic Banking System; the Capacity to React to Current World Wide Crisis مقاله

"c) there is no significant difference between stability in oil and non-oil producing countries, however results change between the small and large banks in the two groups of Islamic and commercial banks which tend to be more stable for oil producing countries. * Equity and Total asset based on Million USD To distinguish the impact of bank size on the Z-score we consider two groups of the small and large Islamic and commercial banks. The macroeconomics variables include: real gross national product growth(GDP), inflation rate(P), exchange rate (EX), and the bank specific variables include: total asset (A), equity (E), cost-income ratio (CI), loans to total assets (LA), income diversity (ID), and structural variables include; governance index (G), Herfindahl index (H), dummy for Islamic banks (D1), dummy for financial crisis (D2) and dummy for oil producing countries (D3). Our estimations, for the small banks, show negative and significant at 1 percent level, which means that small Islamic banks are relatively weaker than commercial banks; these results are also confirmed in the robust regression. Unexpectedly the signs of this coefficient are positive and significant for the large banks, which means that in general, the loans have not negative impact on stability and the performance of these banks are still based on a lending operation. In the small banks, the coefficients have negative and significant signs at 5 percent level; this result confirms the negative impact of loan increase on stability in the period of crisis."