Developments in the performance of the Malaysian banking sector: opportunity cost of regulatory compliance

Sufian, Fadzlan (2010) Developments in the performance of the Malaysian banking sector: opportunity cost of regulatory compliance. International Journal of Business Competition and Growth, 1 (1). pp. 85-103. ISSN 2042-3853 ; 2042-3845

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Abstract

By using bank-level data, this paper examines how regulation and supervision affects the profitability of the Malaysian banking sector over the period 1992–2003. The empirical findings suggest that Malaysian banks with higher liquidity levels, credit risk and overhead expenses exhibit lower profitability level. On the other hand, banks with a higher proportion of income from non-interest sources and better-capitalised exhibit higher profitability level. The results suggest that economic growth and inflation has positive impact on the profitability of the Malaysian banking sector. The empirical findings suggest that the impact of regulation and supervision is negatively related to bank profitability.

Item Type:	Article (Journal)
Additional Information:	6687/5270
Uncontrolled Keywords:	banks; regulation; profitability; Malaysia
Subjects:	H Social Sciences > HG Finance > HG1501 Banking
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Dr. Fadzlan Sufian
Date Deposited:	09 Nov 2011 11:39
Last Modified:	19 Dec 2011 14:27
URI:	http://irep.iium.edu.my/id/eprint/5270

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