EconPapers    
Economics at your fingertips  
 

The causality between returns of interest-based banks and Islamic banks: the case of Turkey

Etem Ergec () and Bengül Gülümser Kaytanci

International Journal of Islamic and Middle Eastern Finance and Management, 2014, vol. 7, issue 4, 443-456

Abstract: Purpose - – This study aims to test whether the Islamic bank rate of returns are affected by the deposit rates of the interest-based bank in Turkey and whether they need to develop additional tools to manage it if they face an interest risk. Design/methodology/approach - – This study tests the causality between the Islamic bank rate of returns and the time deposit interest rates between 2002 and 2010 in Turkey by use of the Granger Causality method based on monthly data. The same analysis is repeated with respect to the terms before and after 2006. Findings - – It is concluded that for each term, the time deposit interest rates are the Granger cause of the Islamic bank rate of returns. This causality relation is more visible for the period after 2006. Originality/value - – The results shows that the Islamic banks are sensitive to the interest-based bank interest rates in Turkey. Therefore, this finding suggests that these banks need to remain cautious

Keywords: Bank deposit rate; Interest rate risk; Islamic banking; codes:- G21; G32 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.emeraldinsight.com/10.1108/IMEFM-07-201 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:imefpp:v:7:y:2014:i:4:p:443-456

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://emeraldgroupp ... ournals.htm?id=imefm

Access Statistics for this article

International Journal of Islamic and Middle Eastern Finance and Management is currently edited by Dr Kabir Hassan

More articles in International Journal of Islamic and Middle Eastern Finance and Management from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

 
Page updated 2020-10-11
Handle: RePEc:eme:imefpp:v:7:y:2014:i:4:p:443-456