The Impact of Global Financial Crisis on the Stability of Islamic Banks in Malaysia
Islamic banking and finance is one of the fastest growing segments in the global banking industry with its own
characteristics. The implementation of the dual banking system in Malaysia started with the establishment of Bank Islam
Malaysia Berhad in 1983. As in 2013, the Islamic banking sector in Malaysia registered a significant achievement in terms
of assets, representing 13% of the total global Islamic banking assets, behind only Iran and Saudi Arabia. The strength of the
banking system can be analysed based on the liquidity risk. Liquidity risk is not just a topic of interest in Islamic banking,
but it is an issue for all banks, including conventional bank and regulatory bodies involved. This study aims to analysethe
effects of the global financial crisis on liquidity in Islamic banking system in Malaysia. To analyse the impact of the
financial crisis with the Islamic banking liquidity, time series data from 2007 to 2015 were used. For the analysis, liquidity
ratio is determined. Secondly, One Way Analysis of Variance (ANOVA) is utilized to test the hypotheses using SPSS.
These findings may have an impact on the Islamic banking system to remain competitive in the uncertainties of the current
economic circumstances. Consequently, the banking system will create more employment opportunities for graduates,
especially in the field of Islamic banking.
Keywords- Financial cricis; Islamic Banking; Banking liquidity