Liquidity Risk Management in Islamic Banking: Comparative Analysis with SUR Methodology for Turkey

Necla Ilter Kucukcolak, Figen Buyukakin, Recep Ali Kucukcolak


Participating banks, emerged as a complementary element in the Turkish financial system since mid-1980s, are continuously increasing their value added to the Turkish banking sector. Therefore, determining whether participation banks and conventional banks differ in liquidity structure and liquidity risk management makes it possible to assess future growth performance of these banks.

The aim of this study is to determine factors effecting liquidity risk in Turkish Islamic banking sector. Method used for this purpose is the Seemingly Unrelated Regression (SUR). The result of study indicates that liquidity risk is significantly affected from credit base and funds collected and; increase in them will increase the liquidity risk. Based on our findings, it is possible to estimate factors effecting participation banks liquidity structure and will be a significant input for asset-liability management. This is noteworthy to have robust Islamic banking sector in Turkey and to manage risk they face accurately.


Islamic Banking, Liquidity Risk, Risk Management, SUR

Full Text:



Abedifar, P., Ebrahim, S., Molyneux, P. Tarazi, A. (2015), “Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research”, Center for Responsible Banking and Finance Working Papers.

Ahmed, N., Ahmed, Z. and Naqvi I.H. (2011), “Liquidity Risk and Islamic Banks: Evidence from Pakistan”, Interdisciplinary Journal of Research in Business, Vol. 1, Issue. 9, pp. 99-102

Akan, N. B. (2008). “Likidite Riski Ölçümü”. Bankacılar Dergisi. Sayı: 66, pp. 66-81.

Akçay, M.B., Bolgün K.E. (2009), Risk Yönetimi, İstanbul: Scala Yayıncılık.

Akkaya, M. And Azimli, T. (2018a). “Türk Bankacılık Sektöründe Likidite Riski Yönetimi”, Finans Politik & Ekonomik Yorumlar Dergisi, Cilt: 55 Sayı: 638, pp. 35-48.

Akkaya, M. And Azimli, T. (2018b). “Azeybaycan Bankacılık Sektöründe Likidite Riski Yönetimi”, International Journal of Economic and Administrative Studies, Issue. 20, pp. 217-232

Akkuş, H. T. (2017). Türk Bankacilik Sektöründeki Katilim Bankalarinin Finansal İstikrarinin Stres testi Yöntemi İle Analizi, Balikesir Üniversitesi Sosyal Bilimler Enstitüsü İşletme Anabilim Dalı Muhasebe Ve Finansman Bilim Dalı, Yayınlanmış Doktora Tezi.

Al-Bashir M. and Al-Amine M. (2013), Risk Management in Islamic Finance: An Analysis of Derivatives Instruments in Commodity Markets,

Almumani, M.A. (2013), “Liquidity Risk Management: A Comparative Study between Saudi and Jordanian Banks”, Interdisciplinary Journal of Research in Business, 3(2), pp. 1-10.

Aloğlu, Z.T. (2005). Bankacılık Sektörünün Karşılaştığı Riskler ve Bankacılık Krizler Üzerindeki Etkileri, TCMB, Uzmanlık Yeterlilik Tezi.

Altıntaş, M. A. (2018). Risk and Capital Management in Banking. Access: 19.03.2018.

Alzoubi, T. (2017), “Determinants of liquidity risk in Islamic banks”, Banks and Bank Systems, Volume 12, Issue 3. pp. 142-148

Anam, S., Hasan, S., Huda, A.E.H, Uddin, A., Hossain, M.M. (2012), “Liquidity Risk Management: A Comparative Study Between Conventional and Islamic Banks of Bangladesh”, Research Journal of Economics, Business and ICT, 5, pp. 1-5.

Arif, A. and Anees A.N. (2012), “Liquidity Risk and Performance of Banking System”, Journal of Financial Regulation and Compliance, 20, pp. 182-195.

Ayaydin, H. And Karaaslan, İ. (2014), “Likidite Riski Yönetimi: Türk Bankacilik Sektörü Üzerine Bir Araştirma”, Business & Management Studies: An International Journal Vol.: 5 Issue: 3 Year: 2017, pp. 703-716.

Azimova, T.(2016), Likidite Riski Yönetimi Ve Azerbaycan Bankacilik Sektörü Üzerine Bir Uygulama, İstanbul Üniversitesi Sosyal Bilimler Enstitüsü İşletme Anabilim Dali Finans Bilim Dali Yayınlanmış Doktora Tezi

Babuşcu, Ş. (2005). Basel II Düzenlemeleri Çerçevesinde Bankalarda Risk Yönetimi. Ankara: Akademi Consulting & Trainig.

Banks, E. (2014), Liquidity Risk: Managing Funding and Asset Risk, 2nd Edition, London: Palgrave MacMillen.

BIS- Bank for International Settlement (2006), The Management of Liquidity Risk in Financial Groups, Basel Committee on Banking Supervision, The Joint Forum, May 2016.

Brinke, K. (2013), “The Turkish 2000-01 Banking Crisis”, Rabobank Economic Report; Accessed on May 5, 2018:

Büyükakın, F., Küçükçolak N.İ. and Küçükçolak R.A. (2018). “Islamic Banking and Risk Management: Case Study for Turkey”, CUDES Vol.19, IJOPEC Publication No: 2018/10

Çelik, S. and Akarım, Y.D. (2012), Liquidity Risk Management: Empirical Analysis with the Sector Panel Data on Istanbul Stock Exchange Banking Sector”, Eskişehir Osmangazi University Social Science Journal, 13(1), pp.1-17.

Chen, Y., Shen, C., Kao, L. and Yeh, C. (2009). “Bank Liquidity Risk And Performance”, Accessed On May 13 2018:

Cihangir, M. (2005). “Finansal Krizlerin Banka Birleşmelerine Etkileri: Kasım 2000 ve Şubat 2001 Krizleri Çerçevesinde Kronolojik Bir Yaklaşım”, Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi, pp. 99-116.

Dridi, J. and Hassan, M.K (2010) The effects of the global crisis on Islamic and conventional banks: A comparative study, International Monetary Fund Working Paper No. 10/201, Washington D.C.: IMF.

Ertürk, H. (2010). “Bankacilik Sektörünün Karşilaştiği Riskler Ve Risk Yönetimi”, Denetişim Dergisi, Sayı. 4, pp. 62-70.

Farooq, M., Zaheer, S. (2015), “Are Islamic Banks More Resilient during Financial Panics?”, IMF Working Paper WP/15/41.

Greuning H. and Iqbal Z. (2008), Risk Analysis for Islamic Banks, The World Bank, Washington D.C. Accsess: 26.09.2018.


Hussain M., Shahmoradi A. and Turk R. (2015), “An Overview of Islamic Finance”, IMF Working Paper, WP/15/120.

IMF Multi-Country Report (2017), “Ensuring Financial Stability in Countries with Islamic Banking- Case Studies”, IMF Country Report No. 17/145, Washington D.C.: IMF.

Iqbal, A. (2012), “Liquidity Risk Management: A Comparative Study between Conventional and Islamic Bank of Pakistan”, Global Journal of Management and Business Research, 12(5), pp. 54-64.

Işıl, G., Özkan, N. (2015), “Liquidity Risk Management in Islamic banking: An Empirical Analysis on the Turkish Participation Banking”, International Journal of Islamic Economics and Finance Studies, Year 1, Vol.1, No.1, pp. 23-37.

Mohamad, A.A., Mohammad T. M. and Muhamad L. (2013), “How Islamic Banks of Malaysia Managing Liquidity? An Emphasis on Confronting Economic Cycles”, International Journal of Business and Social Science, 4(7), pp. 253-263

Mongid, A., (2016), “Global Financial Crisis and Islamic Banks Profitability: Evidence from MENA Countries”, Journal of Emerging Economies and Islamic Research, Vol.4, No.1, pp. 1-16

NIB (2017), Nordic Investment Bank Risk management Policies, accessed on May 24, 2018.

Nikomaram, H., Taqhavi, M., Diman, S.K. (2013), “The relationship between liquidity risk and credit risk in Islamic banking industry of Iran”, Management Science Letters 3, pp.1223-1232

Oubdi, L., Elouali, J. (2016), “Management of Liquidity of Islamic Banks Issues”, ICPESS 2016, Istanbul, pp. 163-176.

Paldi, C. (2014), “Capital Adequacy, Liquidity, and Risk: Is Islamic Banking Too Expensive?”, Journal of Islamic Banking and Finance, 2(1), pp. 407-411.

Rifki, I. (2013), “Shariah Issues in Liquidity Risk Management: A Survey”, Review of Islamic Economics, Vol.12, No.2, pp. 45-66.

Saunders, A. and Cornett M.M. (2008), Financial Institutions Management: A Risk Management Approach, Boston: McGraw-Hill.

Sayım, F. ve Er, S. (2009). “Risk Kavramı ve Bankacılıkta Risk”. TMSF CAT Dergisi. Sayı:22, pp. 7-17.

Shen, C., Yi-Khai Chen, L.K. and Yeh C. (2009), “Bank Liquidity Risk and Performance”, 17th Conference on the Theories and Practices of Securities and Financial Markets, Taiwan.

Sulaiman, A.A., Taqiuddin, M., Samsudin, M.K. (2013), “How Islamic Banks of Malaysia Managing Liquidity? An Emphasis on Cofronting Economic Cycles”, International Business of Business and Social Science, Vol.4, No.7, pp.253-263

Tahir, I. and Haron, S. (2010), “Cost and Profit Efficiency of Islamic Banks: Islamic Banks: International Evidence using the Stochastic Frontier Approach”, Banks and Banks Systems, No.5, Vol.4, pp. 78-83.

Turkey Banks Association (2004), An Evaluation on the Banks’ Risk Management, Working Group on the Risk Management Systems and Application Principles.

Turkish Banks Association web site (; Accessed On 24.04.2018.

Turkish Participation Banks Association (2017), “What is Participation Banking? How does it work?” Access: 20.03.2018.

Turkish Participation Banks Association web site accessed on 24.04.2018.

Yanpar, A. (2014). Islamic Finance, Principles, Tools and Institutions. Istanbul: Scala Publishing.

Zellner, A. (1962). “An Efficient Method of Estimating Seemingly Unrelated Regression and Tests for Aggregation Bias”, Journal of the American Statistical Association, 57 (298), pp. 348-368.

Zengin, S. Ve Yüksel, S. (2016). “Likidite Riskini Etkileyen Faktörler: Türk Bankacilik Sektörü Üzerine Bir İnceleme”, İstanbul Ticaret Üniversitesi Sosyal Bilimler Dergisi Yıl:15 Sayı:29 Bahar 2016/2 s.77-95.



Copyright (c) 2019 Necla ilter kucukcolak

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.



Environmental Science Journals,<br /> Natural Science Journals, SciTech Journals, Illustrata: Natural Science ICV 2015: 81.51DOAJREPEC   citefactor researcherid ECONBIZ ERIHPLUS     Sherpa" researchbib Gale Base    

Ulrichs     Stanford    

cornelniv    oclc     Toc     google
    ez3     ilinois sjif ohs 

Administred: Rocsana B. Manea Tonis