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Roles of the Islamic banks in the monetary transmission process in Malaysia

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Purpose – This paper aims to determine the importance of the Islamic banks in the monetary
transmission process in the Malaysian economy. In particular, the paper analyzes the relevance of
Islamic banks’ financing and deposit in channelling the monetary policy effects to the real economy.
Design/methodology/approach – The paper relies on the co-integration test, impulse response
functions, and variance decomposition analysis, focusing on the period from January 1994 to May 2007.
Findings – The results show that both Islamic banks’ financing and deposit play important roles in
the monetary transmission process in the Malaysian economy. In particular, both Islamic deposit and
financing are shown to be statistically significant in linking the monetary policy indicator to the real
output.
Practical implications – The results imply that the monetary authority should also consider
the Islamic banks in the implementation of monetary policy in Malaysia. The results also imply that
ensuring the stability of the Islamic financial institutions is just as important as that of the
conventional counterpart to achieve an effective transmission of monetary policy in the economy.
Originality/value – This paper is a pioneer study undertaking empirical investigation on the role of
Islamic banks in the monetary transmission process in an economy.

Keywords Monetary policy, Financing, Malaysia, Banks, Islam, Economics

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Ketersediaan

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Informasi Detail

Judul Seri

International Journal of Islamic and Middle Eastern Finance and Management

No. Panggil

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Penerbit

: Emerald Group., 2010

Deskripsi Fisik

International Journal of Islamic and Middle Eastern Finance and Management Vol. 3 No. 1, 2010 pp. 7-19

Bahasa

English

ISBN/ISSN

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Klasifikasi

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Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

EKONOMI

Info Detail Spesifik

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Pernyataan Tanggungjawab

Asmawati/Syahrial

Versi lain/terkait

Lampiran Berkas

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