Inflation targeting and bank risk: The interacting effect of institutional quality

This paper investigates whether institutional quality determines the effect of inflation targeting (IT) on the banking risk of Islamic versus conventional banks, using an unbalanced panel data over the period 2007–2016. However, the use of the generalized method of moments (GMM) and two measures of...

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Autores principales:	Salma Louati, Younes Boujelbene
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2020
Materias:	islamic banks financial stability it quality of institutions Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/7cde79054ffb46cdb4269d3ab3e6757b
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spelling	oai:doaj.org-article:7cde79054ffb46cdb4269d3ab3e6757b2021-12-02T17:01:03ZInflation targeting and bank risk: The interacting effect of institutional quality2331-197510.1080/23311975.2020.1847889https://doaj.org/article/7cde79054ffb46cdb4269d3ab3e6757b2020-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2020.1847889https://doaj.org/toc/2331-1975This paper investigates whether institutional quality determines the effect of inflation targeting (IT) on the banking risk of Islamic versus conventional banks, using an unbalanced panel data over the period 2007–2016. However, the use of the generalized method of moments (GMM) and two measures of institutional quality, namely the Corruption Perception Index and the Government Effectiveness Index, show that the institutional quality failures strengthens the negative impact of IT on conventional banking risk. For the Islamic banking business model, results suggest that corruption impair the good functioning of the price stability channel of financial stability. While IT have different impact on Islamic and conventional banking stability, the operation of these two types of banks in the same corrupt environment reduces the positive effects expected from such a monetary policy.Salma LouatiYounes BoujelbeneTaylor & Francis Grouparticleislamic banksfinancial stabilityitquality of institutionsBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 7, Iss 1 (2020)
institution	DOAJ
collection	DOAJ
language	EN
topic	islamic banks financial stability it quality of institutions Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	islamic banks financial stability it quality of institutions Business HF5001-6182 Management. Industrial management HD28-70 Salma Louati Younes Boujelbene Inflation targeting and bank risk: The interacting effect of institutional quality
description	This paper investigates whether institutional quality determines the effect of inflation targeting (IT) on the banking risk of Islamic versus conventional banks, using an unbalanced panel data over the period 2007–2016. However, the use of the generalized method of moments (GMM) and two measures of institutional quality, namely the Corruption Perception Index and the Government Effectiveness Index, show that the institutional quality failures strengthens the negative impact of IT on conventional banking risk. For the Islamic banking business model, results suggest that corruption impair the good functioning of the price stability channel of financial stability. While IT have different impact on Islamic and conventional banking stability, the operation of these two types of banks in the same corrupt environment reduces the positive effects expected from such a monetary policy.
format	article
author	Salma Louati Younes Boujelbene
author_facet	Salma Louati Younes Boujelbene
author_sort	Salma Louati
title	Inflation targeting and bank risk: The interacting effect of institutional quality
title_short	Inflation targeting and bank risk: The interacting effect of institutional quality
title_full	Inflation targeting and bank risk: The interacting effect of institutional quality
title_fullStr	Inflation targeting and bank risk: The interacting effect of institutional quality
title_full_unstemmed	Inflation targeting and bank risk: The interacting effect of institutional quality
title_sort	inflation targeting and bank risk: the interacting effect of institutional quality
publisher	Taylor & Francis Group
publishDate	2020
url	https://doaj.org/article/7cde79054ffb46cdb4269d3ab3e6757b
work_keys_str_mv	AT salmalouati inflationtargetingandbankrisktheinteractingeffectofinstitutionalquality AT younesboujelbene inflationtargetingandbankrisktheinteractingeffectofinstitutionalquality
_version_	1718382218249764864

Inflation targeting and bank risk: The interacting effect of institutional quality

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