دانلود رایگان مقاله انگلیسی بانکداری اسلامی به عنوان یک پوشش طبیعی برای چرخه های تجاری: سیستم بانکی دوگانه - الزویر 2018

Abstract

We examine the lending patterns in the Turkish Islamic banking over business cycles. We find that, similar to conventional banks, Islamic banks in Turkey exhibit procyclical lending pattern. We also find that Islamic bank lending does not show significant difference from conventional bank lending. The results conflict with some of the findings that indicate Islamic banks as natural stabilizers in the banking systems. We emphasize that regulatory amendments of the last decade that are effective on Islamic banks could induce these banks to lend procyclically. To test the validity of this conjecture, we empirically examine how the state of competition in the Turkish banking system affects bank lending across business cycles by disentangling the effects separately for Islamic and conventional banks. The results suggest that the degree of competition spur bank lending procyclicality at the same magnitude, confirming the convergence between Islamic and conventional banks in their lending patterns. We also discuss several other issues in Islamic banking which may lead to the procyclicality of lending.

7 Conclusion

We investigate Turkish Islamic banking in their lending at different economic conditions. Employing panel data approaches, this study shows that Islamic bank lending in Turkey was procyclical during the period of 2005Q1–2012Q4. Upon exploring whether procyclicality differs between Islamic and conventional banks, we find no significant difference. These conclusions hold under a variety of empirical settings including fixed effects regressions and panel–VAR methodology and alternative specifications.

Upon exploring the motivations of similar procyclicality at Islamic and conventional banks, we empirically found that procyclicality of lending is spurred by the competition in the Turkish banking system as a result of risen convergence between Islamic and conventional banks. As emerged in the early stages of Islamic banking in Turkey (Moore, 1990), Islamic banks might have engaged in enduring competition with conventional banks to grow in a dual banking system. The pressure of competition may lead Islamic banks to converge to conventional bank practices even highly, given the impetus created by the recent amendments in the banking regulations of the country.

We further argue, but not empirically investigate in this paper, that several structural aspects of Islamic banking may lead to procyclicality of Islamic bank lending. The ex–post return distribution of Islamic banks could indeed play a significant role in relieving the impact of economic downturns but we emphasized that the dominance of mark–up instruments in Islamic banking is one of the reason why Islamic banks often fail to absorb economic declines or business shocks. Moreover, we emphasized that loan loss provisioning models of Islamic banks are generally unable to smooth the adverse effects of business cycles. The recent dynamic provisioning models based on expected loan losses have been inadequate to curb the procyclicality of loan loss provisioning and thus procyclical lending. Likewise, there remain certain restrictions in the application of liquidity regulations that could increase asset and loan growth during economic recessions. Next to the impact of competition, these themes are worth examining but we leave them to other researches.