Islamic and Conventional Banks Stability: Comparative Study in Indonesia

Authors

  • Nunung Aini Rahmah, Mohd Abdullah Jusoh, Norlia Mat Norwani

Abstract

The difference in conventional banks' fundamental operations in carrying out the functions as an intermediary bank is generally based on debt and allowed the transfer of Risk, while at Islamic banks by assets and focus on risk-sharing. This study aims to compare the determinant of Islamic and conventional banks' stability during and post-global financial crisis. Z-scores measure bank stability. Internal and external factors can determine bank stability. Internal factors include bank performance, while external factors such as market share, Gross Domestic Product and inflation. Parametric t-test and nonparametric test were employed to examine the comparative of Islamic and conventional banks' stability. The main result of this research, the significant difference between Islamic and conventional banks, on average, Islamic banks more financially stable than conventional banks.

Published

2020-11-01

Issue

Section

Articles