Analysis of the monetary policy transmission through credit, interest rates, and risk line on the profitability of Islamic banks

Saputra, Mochamad Dandy Hadi, Hidayati, Bunga, Riyanto, Feri Dwi and Kafabih, An’im (2022) Analysis of the monetary policy transmission through credit, interest rates, and risk line on the profitability of Islamic banks. Presented at International Conference on Business, Economics, And Sustainability Science, 24-25 Aug 2022, Malang.

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Abstract

Monetary Policy has a target on how banks behave in their role as financial intermediaries. This policy is implemented through different policy transmission lines in the conventional banking sector. Thus, this study was structured with the aim of examining the long-term and short-term effects of monetary policy transmission on credit lines, interest rates, and risk on the profitability of the Islamic banking sector. This study was structured using the VECM method in accordance with the objectives of this study. The findings of this study indicate that all variables are not related to each other. In addition, the results of the study also do not indicate the influence of the transmission of credit channel policies, interest rates, and risks in the short term on the profitability of Islamic banks. The monetary policy in this study only has a long-term effect on the profitability of Islamic banks. This indicates that the Islamic banking sector is sluggish in responding to the dynamics of change from the conventional financial sector which in other words the monetary policy time lag is much larger and has a significant impact on the profitability of the Islamic banking sector.

Item Type:	Conference (Paper)
Keywords:	monetary policy transmission; Islamic banking; profitability; credit; interest rate; risk
Subjects:	14 ECONOMICS > 1401 Economic Theory > 140102 Macroeconomic Theory 14 ECONOMICS > 1402 Applied Economics > 140212 Macroeconomics (incl. Monetary and Fiscal Theory)
Divisions:	Faculty of Economics > Department of Management
Depositing User:	Feri Dwi Riyanto
Date Deposited:	26 May 2023 10:49

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