Determinants of Islamic Banking Vulnerability in Indonesia from 2014 to 2020

Muhammad Iqbal, Sunaryati Sunaryati, Hadri Kusuma


This study aims to analyze the effect of financial performance and macro-economic on Islamic banks' vulnerability in Indonesia from 2014 to 2020. Data were analyzed using the Autoregressive Distributed Lag since their several variables in the economy are dynamic. The results showed that exchange rates and financing are the dominant factors that affect the Islamic banks' vulnerability. Therefore, policymakers tend to identify financial instability and try to avoid the crisis if detected. The Z-score variable in the previous periods (VUL) is another factor that affects Islamic banks' vulnerability


autoregressive distributed lag (ARDL); vulnerability; Islamic banking; Indonesia

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