Role of Islamic Banking during COVID-19 on Political and Financial Events: Application of Impulse Indicator Saturation

This paper attempts to detect the unavoidable impacts of COVID-19 on geopolitical and financial events related to Islamic banking and the finance sector in Pakistan. It considers only those major events that triggered imbalances in the equity prices of selected Islamic banks. Employed here is the GA...

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Autores principales: Ghulam Ghouse, Aribah Aslam, Muhammad Ishaq Bhatti
Formato: article
Lenguaje:EN
Publicado: MDPI AG 2021
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Acceso en línea:https://doaj.org/article/c63b553bcd0a410d91a9f53912771ea2
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spelling oai:doaj.org-article:c63b553bcd0a410d91a9f53912771ea22021-11-11T19:22:31ZRole of Islamic Banking during COVID-19 on Political and Financial Events: Application of Impulse Indicator Saturation10.3390/su1321116192071-1050https://doaj.org/article/c63b553bcd0a410d91a9f53912771ea22021-10-01T00:00:00Zhttps://www.mdpi.com/2071-1050/13/21/11619https://doaj.org/toc/2071-1050This paper attempts to detect the unavoidable impacts of COVID-19 on geopolitical and financial events related to Islamic banking and the finance sector in Pakistan. It considers only those major events that triggered imbalances in the equity prices of selected Islamic banks. Employed here is the GARCH model, used to predict the volatility series using daily data from January 2007 to July 2020. The Impulse Indicator Saturation (IIS) helps to identify the structural breaks due to COVID-19, as well as the effects of political and financial events on the returns and volatility series of Islamic banks. The results indicate that all the events due to COVID-19 are significant. While 19 out of 21 political and financial events impacted the returns and volatility series, there were only 2 political events out of 18 that showed no significant effect on the returns and the volatility series. The state’s and Islamic banks’ policymakers can use these results to build an effective and sustainable financial policy regarding Islamic finance and the banking sector.Ghulam GhouseAribah AslamMuhammad Ishaq BhattiMDPI AGarticleCOVID-19PakistanPSXKSE 100Islamic banking and financevolatilityEnvironmental effects of industries and plantsTD194-195Renewable energy sourcesTJ807-830Environmental sciencesGE1-350ENSustainability, Vol 13, Iss 11619, p 11619 (2021)
institution DOAJ
collection DOAJ
language EN
topic COVID-19
Pakistan
PSX
KSE 100
Islamic banking and finance
volatility
Environmental effects of industries and plants
TD194-195
Renewable energy sources
TJ807-830
Environmental sciences
GE1-350
spellingShingle COVID-19
Pakistan
PSX
KSE 100
Islamic banking and finance
volatility
Environmental effects of industries and plants
TD194-195
Renewable energy sources
TJ807-830
Environmental sciences
GE1-350
Ghulam Ghouse
Aribah Aslam
Muhammad Ishaq Bhatti
Role of Islamic Banking during COVID-19 on Political and Financial Events: Application of Impulse Indicator Saturation
description This paper attempts to detect the unavoidable impacts of COVID-19 on geopolitical and financial events related to Islamic banking and the finance sector in Pakistan. It considers only those major events that triggered imbalances in the equity prices of selected Islamic banks. Employed here is the GARCH model, used to predict the volatility series using daily data from January 2007 to July 2020. The Impulse Indicator Saturation (IIS) helps to identify the structural breaks due to COVID-19, as well as the effects of political and financial events on the returns and volatility series of Islamic banks. The results indicate that all the events due to COVID-19 are significant. While 19 out of 21 political and financial events impacted the returns and volatility series, there were only 2 political events out of 18 that showed no significant effect on the returns and the volatility series. The state’s and Islamic banks’ policymakers can use these results to build an effective and sustainable financial policy regarding Islamic finance and the banking sector.
format article
author Ghulam Ghouse
Aribah Aslam
Muhammad Ishaq Bhatti
author_facet Ghulam Ghouse
Aribah Aslam
Muhammad Ishaq Bhatti
author_sort Ghulam Ghouse
title Role of Islamic Banking during COVID-19 on Political and Financial Events: Application of Impulse Indicator Saturation
title_short Role of Islamic Banking during COVID-19 on Political and Financial Events: Application of Impulse Indicator Saturation
title_full Role of Islamic Banking during COVID-19 on Political and Financial Events: Application of Impulse Indicator Saturation
title_fullStr Role of Islamic Banking during COVID-19 on Political and Financial Events: Application of Impulse Indicator Saturation
title_full_unstemmed Role of Islamic Banking during COVID-19 on Political and Financial Events: Application of Impulse Indicator Saturation
title_sort role of islamic banking during covid-19 on political and financial events: application of impulse indicator saturation
publisher MDPI AG
publishDate 2021
url https://doaj.org/article/c63b553bcd0a410d91a9f53912771ea2
work_keys_str_mv AT ghulamghouse roleofislamicbankingduringcovid19onpoliticalandfinancialeventsapplicationofimpulseindicatorsaturation
AT aribahaslam roleofislamicbankingduringcovid19onpoliticalandfinancialeventsapplicationofimpulseindicatorsaturation
AT muhammadishaqbhatti roleofislamicbankingduringcovid19onpoliticalandfinancialeventsapplicationofimpulseindicatorsaturation
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