Comparative analysis of islamic banks and deposit banks within the framework of the asymmetric information problem

The aim of the study is to test the asymmetric information problem in financial market, separately during economic stability and economic crisis periods for the Islamic banks and deposit banks in terms of not only the variables in bank balance sheet (throughout the study these variables are called micro variables) but also macroeconomic variables. In the study, three separate models are built in which non-performing loans of deposit and Islamic banks are taken as dependent variables. The first two models are composed of micro variables, in other words variables in bank's balance sheet. And the third model is composed of macroeconomic variables. Assuming that during the economic crisis and economic stability periods, the asymmetric information problem alters, one of the nonlinear modeling techniques, Markov regime change vector autoregressive method MSIAH-VAR, is used in the analysis. The study was prepared to test 6 hypotheses within the framework of the asymmetric information problem. According to the findings obtained from the analysis, within the framework of the hypothesis "asymmetric information problem is less in Islamic banks" and interpreting based on micro variables and macroeconomic variables, it is observed that Islamic banks are showing better performance than deposit banks. Second hypothesis is that Islamic banks are more stable than deposit banks in times of crisis. Regarding this hypothesis, since Islamic banks keep their equity stronger, it shows that Islamic banks have more robust structure in time of crisis. Within the framework of third hypothesis, it is concluded that Islamic banks contribute more to the real economy. The fourth hypothesis shows that when equity and asset values of the two types of banks are compared, it is seen that Islamic banks have a more equity-dependent structure. In the context of the fifth hypothesis, it has been observed that the problem of asymmetric information between monetary policy instruments and participation banks is higher than that of deposit banks. The sixth hypothesis is a general evaluation of the study and within the framework of this hypothesis; it is implied that the asymmetric information problem is less in Islamic banks during both economic stability and crisis period.