Default Risk on Islamic Banking in Indonesia

Budiandru, Budiandru (2021) Default Risk on Islamic Banking in Indonesia. Journal of Economics, Business, and Accountancy Ventura, 24 (1). pp. 49-62. ISSN 2087-3735

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Abstract

The problem of default by debtors becomes a primary concern for Islamic banking
recently. This study analyzes the effect of economic pressure on the risk of default on
Islamic banks, both in the short and long term, the risk response of default, and also
other variables' contribution in explaining the diversity of risk of default of Islamic
banks. This study used monthly data from 2007 to 2020 by using a vector error
correction model. The results show that inflation and exchange rates affect the risk of
default in the short term, while inflation, exchange rates, and interest rates affect the
risk of default in the long run. Non-performing financing quickly stabilized when
responding to the interest rates. The Islamic stock index has the most significant
contribution in explaining the diversity of default risks. Islamic banks must be aware
of the monetary fluctuation and also careful in analyzing the demand for financing
by looking at the future economic prospects.

Item Type:	Article
Subjects:	H Social Sciences > HC Economic History and Conditions
Divisions:	Fakultas Ekonomi dan Bisnis > Akuntansi S1
Depositing User:	Dr Budiandru Budiandru
Date Deposited:	24 Aug 2021 14:28
Last Modified:	24 Aug 2021 14:28
URI:	http://repository.uhamka.ac.id/id/eprint/9683

Available Versions of this Item

• Default Risk on Islamic Banking in Indonesia. (deposited 24 Aug 2021 14:28) [Currently Displayed]
  • Jurnal, Peer review, LoA, dan Coressponden Default Risk on Islamic Banking in Indonesia. (deposited 01 Feb 2023 09:32)

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