Liquidity risk of Islamic banks in Malaysia / Khalida Jamal

Liquidity risk shows the institution's ability whether the institution will be able to continue as a going concern. Liquidity risk has been one of the main drivers of the current credit crisis and the most familiar risk with Islamic and conventional banks. Most of the bank's failures, whether they are Islamic or conventional banks, are due to the difficulties in managing the liquidity needs (Abdul Majid,2003) So, it is necessary to study the factor that contribute the liquidity risk of the Islamic banks in Malaysia. This research conducts a study for local Islamic Banks in Malaysia. Other than that, the aim of this research is determine the factors that contribute the liquidity risk in Islamic banks in Malaysia. The variables include return on asset, return on equity and capital adequacy ratio. This research use secondary data collected from the previous researched and data extracted from bankscope data of the selected Islamic banks from 2009 until 2015. 10 Islamic banks were selected among Malaysia banking sector. This research is using panel data to analyse the data collected and the method use is generalised least square.