FINANCIAL INTERMEDIATION COSTS IN A DUAL BANKING SYSTEM: THE ROLE OF ISLAMIC BANKING

Mansor Ibrahim and Siong Hook Law

Bulletin of Monetary Economics and Banking, 2019, vol. 22, issue 4, 531-552

Abstract: This paper empirically analyses the role of Islamic banking in financial intermediation costs as measured by net interest margins for a leading dual banking country, Malaysia. Controlling for theoretically motivated determinants of the margins, the paper compares the interest/financing margins of conventional and Islamic banks and examines the impacts of Islamic banking presence on bank margins. The analysis provides evidence of the higher margins of Islamic banks compared to those of conventional banks.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:22:y:2019:i:4g:p:531-552

DOI: 10.21098/bemp.v22i4.1236

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