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THE INFLUENCE OF INTERNAL AND EXTERNAL FACTORS ON FINANCIAL SYSTEM STABILITY IN ISLAMIC BANKING IN INDONESIA agrayi afifa putri; Muhammad iqbal; Liya Ermawati
I-Finance Journal Vol 11 No 1 (2025): I-FINANCE: a Research Journal on Islamic Finance
Publisher : Fakultas Ekonomi dan Bisnis Islam Universitas Islam Negeri Raden Fatah Palembang, Indonesia

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.19109/ifinance.v11i1.27398

Abstract

This research aims to analyze the influence of internal and external factors on the stability of the financial system in Islamic banking in Indonesia from 2018 to 2023. Quantitative research methodology is employed.The population in this study consists of 13 Islamic commercial banks registered with the OJK from 2018 to 2023.The sample used in this study employed purposive sampling technique, resulting in a total sample of 8 companies with a total of 48 observation data.The data analysis technique in this study uses panel data regression with the stages of Chow test, Hausman test, LM test, and multicollinearity test. as well as hypothesis testing using the stages of the F-test, t-test, and coefficient of determination (R2).The results of this study prove that the capital buffer has a significant positive effect on the stability of the financial system. Additionally, it was discovered that while inflation had a significant detrimental effect on the stability of the financial system, BOPO and GDP had a significant positive impact. The fixed effects model was determined to be the most suitable model for this study based on the findings of the Chow, Hausman, and LM tests.The stability of the Islamic banking financial system from 2018 to 2023 is impacted concurrently by the capital buffer, BOPO, GDP, and inflation