Interest Rate Risk in Interest-free Banks: An Empirical Research on Turkish Participation Banks

Basit Öğe Kaydı
dc.contributor.authorKoç, İlker
dc.date.accessioned2020-11-21T15:56:05Z
dc.date.available2020-11-21T15:56:05Z
dc.date.issued2018en_US
dc.departmentİstanbul Ticaret Üniversitesien_US
dc.description.abstractParticipation banks, which are globally called Islamic Banks or interest-free banks, basically receive funds based on profit-loss sharing principle and make loans via purchasing a commodity or a service and selling it to customers for a higher price (murabaha method) or profit-loss sharing investment contracts (mudarabah or musharakah method). In literature, most of theoretical studies suggest that interest-free banks' business model is based on profit-lost sharing principles and therefore unlike conventional banks these institutions are not exposed to interest rate risk. Conversely some empirical studies suggest that Islamic banks' profitability is affected by market interest rates and these institutions are exposed to interest rate risk. In this study, with reference to Basel Committee's definition of interest rate risk, effects of market interest rate fluctuation on the profitability of Turkish Participation Banks has been analyzed with Seemingly Unrelated Regression method for the period between June 2005 and June 2016. It is found that there is a significant relationship between the profitability of the participation banks and interest rate changes and therefore each institution is exposed to the interest rate risk at different levels.en_US
dc.identifier.doi10.26414/tujise.2018.5.1.89-107en_US
dc.identifier.endpage107en_US
dc.identifier.issn2587-2303
dc.identifier.issn2587-232X
dc.identifier.issue1en_US
dc.identifier.startpage89en_US
dc.identifier.urihttps://doi.org/10.26414/tujise.2018.5.1.89-107
dc.identifier.urihttps://hdl.handle.net/11467/4088
dc.identifier.volume5en_US
dc.identifier.wosWOS:000439115500005en_US
dc.identifier.wosqualityN/Aen_US
dc.indekslendigikaynakWeb of Scienceen_US
dc.language.isoenen_US
dc.publisherResearch Center Islamic Economics-Ikamen_US
dc.relation.ispartofTurkish Journal of Islamic Economics-Tujiseen_US
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/openAccessen_US
dc.subjectIslamic Bankingen_US
dc.subjectInterest-Free Financeen_US
dc.subjectInterest Rate Risken_US
dc.subjectSeemingly Unrelated Regressionen_US
dc.titleInterest Rate Risk in Interest-free Banks: An Empirical Research on Turkish Participation Banksen_US
dc.typeArticleen_US

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