ANALYSIS OF THE TRANSMISSION ASYMMETRY OF MONETARY POLICY IN A DUAL BANKING SYSTEM: ECONOMETRIC MODELLING (CASE OF TURKEY)

Keywords: Monetary Policy, Transmission Asymmetry, Islamic Bank, Conventional Bank, Central Bank.

Abstract

The purpose of this research is to analyze the transmission mechanism of monetary policy in a dual banking system, composed of both Islamic banks and Conventional banks, highlighting the factors that may influence behavior of Banks on the impact of monetary stimuli on their rates. In this context, an econometric model that examines the effectiveness of transmission of monetary policy in a dual banking system by advocating the hypothesis of asymmetric transmission of monetary policy was developed and tested. To answer the research problem, the adopted methodology is based on the Vectoriel Autoregressive (VAR) model, which is not only explanatory but also predictive.

The different results obtained through the empirical investigation carried out are discussed by exposing their methodological and theoretical implications.

Author Biographies

Maha Radwan, University of Turin

Department of Management, University of Turin

SALMA DRISSI, ENCG Agadir, University Ibn Zohr (Morocco)

Laboratory of Research in Performance Management of Public, Private Organizations and Social Economy, University Ibn Zohr, Morocco

References

REFERENCES

Abedifar, P., Molyneux, P., & Tarazi, A. (2013). Risk in Islamic banking. Review of Finance, 17(6), 2035-2096.

Alam, N., & Parinduri, R. A. (2017). Do Islamic banks shift from mark-up to equity financing when their contracting environments are improved? Applied Economics Letters, 24(8), 545-548.

Bikker, J. A., & Hu, H. (2002). Cyclical patterns in profits, provisioning and lending of banks and procyclicality of the new Basel capital requirements. PSL Quarterly Review, 55(221).

Boughrara, A., & Ghazouani, S. (2010). Is there a bank lending channel of monetary policy in selected MENA countries? A comparative analysis. Middle east development journal, 2(02), 251-282.

BUĞAN, M. F. (2015). KATILIM BANKALARI İLE KONVANSİYONEL BANKALARIN ETKİNLİKLERİNİN VZA VE MALMQUİST TFV ENDEKSİ İLE KARŞILAŞTIRILMASI.

Cekici, I. Z. (2019). Participative Banking in Turkey Islamic Finance in Europe (pp. 291-316): Springer.

Cevik, S., & Charap, J. (2015). The behavior of conventional and Islamic bank deposit returns in Malaysia and Turkey. International Journal of Economics and Financial Issues, 5(1), 111-124.

Chapra, M. U. (2008). The global financial crisis: can Islamic finance help minimize the severity and frequency of such a crisis in the future? Paper presented at the A paper presented at the Forum on the Global Financial Crisis at the Islamic Development Bank on.

Čihák, M., & Hesse, H. (2010). Islamic banks and financial stability: An empirical analysis. Journal of Financial Services Research, 38(2-3), 95-113.

d’Arvisenet, P., & Choulet, C. (2008). La stratégie d’internationalisation des institutions financières. RISQUES les cahiers de l’assurance(75).

DRISSI, S., & ANGADE, K. (2017). La Concurrence Interbancaire Et La Transmission De La Politique Monetaire: Cadre Analytique. Revue Economie, Gestion et Société(14).

Elnahass, M., Izzeldin, M., & Abdelsalam, O. (2014). Loan loss provisions, bank valuations and discretion: A comparative study between conventional and Islamic banks. Journal of Economic Behavior & Organization, 103, S160-S173.

Ergeç, E. H., & Arslan, B. G. (2013). Impact of interest rates on Islamic and conventional banks: the case of Turkey. Applied Economics, 45(17), 2381-2388.

Gulzar, R., & Masih, M. (2015). Islamic banking: 40 years later, still interest-based? Evidence from Malaysia.

Hasan, M. M., & Dridi, J. (2010). The effects of the global crisis on Islamic and conventional banks: A comparative study. IMF Working Papers, 1-46.

Hassan, T., Mohamad, S., & Khaled I. Bader, M. (2009). Efficiency of conventional versus Islamic banks: evidence from the Middle East. International Journal of Islamic and Middle Eastern Finance and Management, 2(1), 46-65.

Kaleem, A. (2000). Modeling monetary stability under dual banking system: the case of Malaysia. International Journal of Islamic Financial Services, 2(1), 21-42.

Kansoy, F., & Karlioglu, H. H. (2013). Islamic Finance as a Means to Make Istanbul an International Financial Centre. Afro Eurasian Studies, 2(1-2), 126-143.

Kashyap, A. K., & Stein, J. C. (1995). The impact of monetary policy on bank balance sheets. Paper presented at the Carnegie-Rochester Conference Series on Public Policy.

Kassim, S., Mohd Yusof, R., & Abdul Majid, M. (2008). Dynamic relationship between monetary policy and bank balance sheet items of the Islamic and conventional banks: the case of Malaysia. Review Of Islamic Economics, 12(2), 25-44.

Khan, F. (2010). How ‘Islamic’is Islamic banking? Journal of Economic Behavior & Organization, 76(3), 805-820.

Kishan, R. P., & Opiela, T. P. (2000). Bank size, bank capital, and the bank lending channel. Journal of money, credit, and banking, 32(1), 121.

Rosly, S. A. (1999). Al‐Bay'Bithaman Ajil financing: impacts on Islamic banking performance. Thunderbird International Business Review, 41(4‐5), 461-480.

Samad, A. (2004). Performance of Interest-free Islamic banks vis-à-vis Interest-based Conventional Banks of Bahrain. International Journal of Economics, Management and Accounting, 12(2).

Sukmana, R., & Kassim, S. H. (2010). Roles of the Islamic banks in the monetary transmission process in Malaysia. International Journal of Islamic and Middle Eastern Finance and Management, 3(1), 7-19.

Varsak, S. (2017). Katılım Bankalarının Kullandırdığı Fonların Makro İktisadi Göstergeler Üzerindeki Etkileri: Türkiye Örneği. Yayınlanmamış Doktora Tezi, Kütahya Dumlupınar Üniversitesi Sosyal Bilimler Enstitüsü, Kütahya.

Vazquez, F., & Federico, P. (2015). Bank funding structures and risk: Evidence from the global financial crisis. Journal of banking & finance, 61, 1-14.

Radwan, M., (2019). Adoption of Unconventional Financial Institutions: A European Perspective, Giappichelli, Torino, 2019. 1-128.

Biancone, P. P., & Radwan, M. (2019). Social Finance and Financing Social Enterprises: An Islamic Finance Prospective. European Journal of Islamic Finance.

Biancone, P. P., & Radwan, M. (2018). Sharia-Compliant financing for public utility infrastructure. Utilities Policy, 52, 88-94.

Biancone, P. P., Secinaro, S., & Kamal, M. (2019). Crowdfunding and Fintech: business model sharia compliant. European Journal of Islamic Finance, (12).

Published
2020-03-16
How to Cite
Radwan, M., & DRISSI, S. (2020). ANALYSIS OF THE TRANSMISSION ASYMMETRY OF MONETARY POLICY IN A DUAL BANKING SYSTEM: ECONOMETRIC MODELLING (CASE OF TURKEY). European Journal of Islamic Finance. https://doi.org/10.13135/2421-2172/4227

Most read articles by the same author(s)