The Influence of Fundamental Factors to Liquidity Risk on Banking Industry (Case Study between Conventional and Islamic Banks in Indonesia)

Abstract

Bank and risk are two things that can not be separated from each other. Both conventional and Islamic banks are more or less similar in risk summary. One of the critical risk is liquidity risk that caused by bank having no ability to meet their maturity dates of depositors. Therefore it needs further observation to control their liquidity risk. This study investigates the influence of CAR, profitability ratios, NIM, liquidity gaps, and RLA belongs to liquidity risk on banking industry. The population of this study consists of conventional and Islamics banks. The selection of samples uses purposive sampling method. The samples are divided into 3 conventional banks and 3 Islamic banks. The study is based on secondary data in a period of five years, i.e. 2007-2011. The statistical analysis of secondary data has been devided into three, which are desccriptive, regression and hypothesis testing. The study found negative and significant influence of CAR and ROE to liquidity risk on conventional banks, while ROA and RLA have positive and insignificant effect. In Islamic banks, the research found positive and significant impact of NIM and ROE to dependent variable, whereas liquidity gaps and RLA have insignificant affect. Liquidity gaps have positive and significant effect to liquidity risk in concentional banks, while ROA has positive direction in Islamic banks. In addition, NIM in conventional banks and CAR in Islamic banks is found to be negative and insignificant at 5% significance level