How Islamic Banks of Malaysia Managing Liquidity? An Emphasis on Confronting Economic Cycles
Ahmad Azam Sulaiman @ Mohamad, Mohammad Taqiuddin Mohamad, Muhamad Lukman Samsudin

Abstract
Bank liquidity is a key element in managing the assets of a bank. Bank liquidity is an important element in managing the assets of a bank. The robust and sound liquidity management could raise funds to meet the demands of depositors and borrowers at any time with a satisfactory price. Without sufficient liquidity, the bank may face other risks, such as various forms of fiduciary risk, displaced commercial risk as well as other risks that affect the banks financial stability as a whole. Thus by using a dynamic panel data estimation for 17 Islamic banks, this study tried to see how Islamic banking of Malaysia manage their liquidity in response to changes on the basis of several factors other than providing a realistic number of policy implications.

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