The determinants of bank regulations and supervision on the efficiency of Islamic Banks in MENA regions*

Mohd Noor, Nor Halida Haziaton and Bakri, Mohammed Hariri and Wan Yusof, Wan Yusrol Rizal and Mohd Noor, Nor Raihana Asmar and Abdullah, Hasni (2020) The determinants of bank regulations and supervision on the efficiency of Islamic Banks in MENA regions*. Journal of Asian Finance, Economics and Business, 7 (12). pp. 245-254. ISSN 2288-4637

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Abstract

This study investigates the impact of the country’s governance on the revenue efficiency in the banking sectors of 42 Islamic banks in 15 countries offering Islamic banking and financial services. Technical efficiencies of individual Islamic banks were analyzed using the Data Envelopment Analysis method. The Ordinary Least Square estimation method is employed to examine the impact of country supervision and regulation on the technical efficiency of Islamic banks. With robustness check, the study assesses the impact of bank regulations and supervision on the efficiency of Islamic banks operating in different regions. The empirical findings suggest that supervisory power, activity restrictions, and private monitoring positively influence the efficiency of Islamic banks. On the other hand, we observe a negative impact of capital requirement on Middle East and North Africa (MENA) countries. The findings indicate that supervisory power, activity restrictions, and private monitoring positively influence the efficiency of Islamic banks in Asia, but vice versa on capital requirement in MENA countries. This study will contribute to the body of knowledge by assessing the types of reforms in bank regulations and supervision that work best for Islamic banks in order to increase the level of efficiency and the level of regulations and supervision of Islamic banks.

Item Type:	Article
Uncontrolled Keywords:	Supervision, Bank regulation, Islamic banks, Data envelopment analysis, MENA
Divisions:	Faculty of Technology Management and Technopreneurship
Depositing User:	Sabariah Ismail
Date Deposited:	16 Apr 2021 16:03
Last Modified:	03 Aug 2023 15:36
URI:	http://eprints.utem.edu.my/id/eprint/25101
Statistic Details:	View Download Statistic

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