October 7, 2025Banks and Bank SystemsOpen Access

Financial risk management, capital adequacy, and stability of Islamic banks: The moderating effect of efficiency in the Indonesian and Malaysian context

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Discussion

Research reveals efficiency moderates liquidity and credit risk effects on Islamic bank stability, indicating improvement in financial management.

Lower liquidity risk and credit risk enhance the stability of Islamic banks significantly.
Higher capital adequacy correlates with improved financial stability in these banks.
Efficiency moderates the relationship between credit risk, liquidity risk, and capital adequacy on bank stability.
System-GMM analysis effectively addresses endogeneity issues in the study.

Maulana et al. (2025) studied this question.

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Research reveals efficiency moderates liquidity and credit risk effects on Islamic bank stability, indicating improvement in financial management.