Off-Balanced Sheet Risk: Evidence From Malaysia Islamic And Conventional Banks

Off-­balance sheet activities in banking generate different impact toward its risks. Specifically, this paper studies the impact of off-balance sheet activities towards bank risk such as default risk, liquidity risk and leverage risk for Islamic and conventional bank in Malaysia. The aim of this stu...

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Bibliographic Details
Main Authors: Wahida Ahmad, Faridah Najuna Misman
Format: Article
Language:English
Published: Universiti Sains Islam Malaysia 2015
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Online Access:http://ddms.usim.edu.my/handle/123456789/9052
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Summary:Off-­balance sheet activities in banking generate different impact toward its risks. Specifically, this paper studies the impact of off-balance sheet activities towards bank risk such as default risk, liquidity risk and leverage risk for Islamic and conventional bank in Malaysia. The aim of this study is to examine the effects the individual off-balance sheet activities towards bank risks as well as to compare their off-balance sheet attitudes between Islamic and conventional banking operators in Malaysia. The study consists of three years unbalanced panel data from 2006-2008. The quantitative analysis using General Least Square estimation to these two different groups of banks provides mixed results.