Determining and Examining the Performance Index of Dual Banking System: A Panel Data Comparative Analyse for Turkey

Selim Demez, Murat Ustaoğlu () and Ahmet İncekara
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Selim Demez: Hakkari University, Faculty of Economics, Hakkari, Turkey
Murat Ustaoğlu: Istanbul University, Faculty of Economics, Istanbul, Turkey
Ahmet İncekara: Istanbul University, Faculty of Economics, Istanbul, Turkey

Istanbul Journal of Economics-Istanbul Iktisat Dergisi, 2018, vol. 68, issue 2, 221-241

Abstract: In addition to basic financial transactions, the banks generate a variety of financial instruments and exploits the advantages associated with the globalization trend. It is not realistic to speak of an alternative that would end the domination of the interest-based conventional system in the global economy. However, Islamic banking, operating based on the profit and loss share, has become popular despite the fact that it has been introduced only some decades ago in some Muslim countries. The Islamic banking system has been in recent years compared to the conventional banking system. Measures taken in light of findings based on studies focusing on different variables and datasets will help minimize the impacts of the recessions and crises in the near future. This study analyzes the performance of three Islamic and nine conventional banks in Turkey after the 2008 global financial crisis (in the period of 2010-2015) by reliance on the panel data model. The findings in the study reveal that the conventional bank performance affects the banksize, reserves, real effective exchange rate and real interest rate whereas the impact has been greater in the case of Islamic banks upon banksize, deposit rate, reserves, market concentration, real effective exchange rate and real interest rate.

Keywords: Islamic Finance; conventional banks; performance index (search for similar items in EconPapers)
JEL-codes: C58 G21 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ist:journl:v:68:y:2018:i:2:p:221-241

DOI: 10.26650/ISTJECON2018-0001

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