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Abstract
Islamic banking is a component of financial institutions and the global financial system. Although the size of Islamic banking with conventional banking is smaller, the vulnerability in Islamic banking always within it. This is due to the presence of various financial risks that follow the credit cycle. Besides that, there is no one who concludes clearly that Islamic banking is more resilient than conventional banking. Therefore, some regulations need to be issued to maintain the balance and adaptive aspects of Islamic banking resilience. So that this research aims to measure the optimal level of pressure because of financing activities. This research uses an early warning system approach to estimate optimal pressure levels in Islamic banking caused by funding activities using monthly data from 2010 to 2018. The findings of this research indicate that the optimal level of pressure in Islamic banking is basically to maintain a certain financing risk and provide an optimal level caused by external shocks. This research found that the optimal level of pressure is between - 0.41 to 0.08. Finally, this research concludes that the resilience of Islamic banking in Indonesia requires a balanced asset-financing allocation by lowering non-performing financing, increasing liquid assets, and sound capital adequacy.
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References
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References
Alamsyah, H. (2012). Perkembangan dan prospek perbankan syariah Indonesia: Tantangan dalam menyongsong MEA 2015. Disampaikan dalam Ceramah Ilmiah Ikatan Ahli Ekonomi Islam (IAEI), Milad ke-8 IAEI, 13 April 2012. https://www.bi.go.id/id/ruang-media/pidato-dewan-gubernur/documents/6bf00812e40b4d0cb140ea80239c4966perkembanganprospekperbankansyariahindonesiamea201.pdf.
Briguglio, L., Cordina, G., Farrugia, N., & Vella, S. (2008). Economic vulnerability and resilience: Concepts and measurements. UNU-WIDER Research Paper No. 2008/55. United Nations University (UNU) - World Institute for Development Economics Research (WIDER). https://www.wider.unu.edu/publication/economic-vulnerability-and-resilience.
Kaminsky, G., Lizondo, S., & Reinhart, C. M. (1997). Leading Indicators of Currency Crises. IMF Working Paper, WP/97/79. International Monetary Fund. https://www.imf.org/en/Publications/WP/Issues/2016/12/30/Leading-Indicators-of-Currency-Crises-2256.
Ogawa, E., & Shimizu, J. (2011). Asian Monetary Unit and Monetary Cooperation in Asia. ADBI Working Paper Series, 275. Asian Development Bank Institute. Retrieved from https://www.adb.org/sites/default/files/publication/156130/adbi-wp275.pdf.
Organisation for Economic Co-operation and Development. (2008). Handbook on constructing composite indicators: Methodology and user guide. https://www.oecd.org/els/soc/handbookonconstructingcompositeindicatorsmethodologyanduserguide.htm.
Otoritas Jasa Keuangan. (2019). Laporan Triwulanan: Triwulan I - 2019. Retrieved from https://www.ojk.go.id/id/data-dan-statistik/laporan-triwulanan/Pages/-Laporan-Triwulan-I---2019.aspx.
Rose, A. K., & Spiegel, M. M. (2009). Cross-country causes and consequences of the 2008 crisis: International linkages and American exposure. Federal Reserve Bank of San Francisco Working Paper Series, 2009-18. Retrieved from https://www.frbsf.org/economic-research/files/wp09-18bk.pdf.
Saisana, M., & Tarantola, S. (2002). State-of-the-art report on current methodologies and practices for composite indicator development. EUR 20408 EN. Ispra, Italy: European Commission, Joint Research Centre, Institute for the Protection and the Security of the Citizen, Technological and Economic Risk Management.
Wiranatakusuma, D. B. (2017). An inquiry into resilience of Islamic Banking in Indonesia (Doctoral Dissertation, International Islamic University Malaysia).
Yalesperdani, D., Birowo, A.W., Robinson, I., Fitriany, Sinartha, I. N. Y., & Putra, E. (2016). Bank Industry Rating dan Risk Register: Tools Pengawasan Makroprudensial Bank Indonesia. Kajian Stabilitas Keuangan, 26, 223-233.