Contribution of Islamic Banks on Financial and Economic Stability: An Empirical Comparison Between Conventional and Islamic Banks

Selim Kayhan () and Tayfur Bayat ()
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Selim Kayhan: Necmettin Erbakan University
Tayfur Bayat: Inonu University

Chapter Chapter 14 in Islamic Finance and Sustainable Development, 2021, pp 331-348 from Springer

Abstract: Abstract The changing environment of World economy after the global financial crisis in 2008 has led to the modification of monetary policies and financial system regulations. In this regard, banking system has become an important component of economic policies implemented by mainly central banks such as leaning against the wind. The stability of banking indicators has become important for both financial system stability and macroeconomic stability. In this study, we aim to test the performance of banking system in achieving financial stability and effect on macroeconomic indicators after the end of the quantitative easing program of FED in May 2013. Different from existing studies, we investigate them for conventional banks and Islamic banks separately. By doing so, we will be able to compare the effect of Islamic understanding on financial system and economy of the Turkish economy. Possible differences between conventional and Islamic banks might give us some insight into the superiority of the Islamic finance system.

Keywords: Financial stability; Turkish financial system; Times series analysis (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-76016-8_14

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DOI: 10.1007/978-3-030-76016-8_14

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