Journal ArticleDOI
Risk in Islamic Banking
TLDR
In this article, the authors investigated risk and stability features of Islamic banking using a sample of 553 banks from 24 countries between 1999 and 2009 and found that small Islamic banks that are leveraged or based in countries with predominantly Muslim populations have lower credit risk than conventional banks.Abstract:
This paper investigates risk and stability features of Islamic banking using a sample of 553 banks from 24 countries between 1999 and 2009. Small Islamic banks that are leveraged or based in countries with predominantly Muslim populations have lower credit risk than conventional banks. In terms of insolvency risk, small Islamic banks also appear more stable. Moreover, we find little evidence that Islamic banks charge rents to their customers for offering Sharia compliant financial products. Our results also show that loan quality of Islamic banks is less responsive to domestic interest rates compared to conventional banks.read more
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Differential market valuations of board busyness across alternative banking models
TL;DR: In this article, the influence of board busyness (i.e., multiple directorships of outside directors) on stock market valuations of both Islamic and conventional banks is assessed. And the authors find no supporting evidence on the market valuation of board activeness in Islamic banks, which might be attributed to the complex governance structure and the uniqueness of the business model which require additional effective monitoring, relative to that employed in conventional banking.
Journal ArticleDOI
Stability and profitability in the Chinese banking industry: evidence from an auto-regressive-distributed linear specification
Yong Tan,John Anchor +1 more
TL;DR: In this article, the authors investigated the interrelationships between profitability and stability in the Chinese banking industry using a sample of Chinese commercial banks over the period 2003-2013, using an auto-regressive-distributed linear model.
Journal ArticleDOI
Monetary Operations and Islamic Banking in The GCC: Challenges and Options
TL;DR: In this article, the authors present evidence of market segmentation across Islamic and conventional banks in the Gulf Cooperation Council (GCC), leading to excess liquidity, and an uneven playing field for Islamic banks that might affect their growth.
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Bank risk and financial development: evidence form dual banking countries
Abstract: This study examines the impact of financial development on bank risk-taking, measured as bank capitalization and bank income diversification. We observe the relationship using annual bank-l...
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Fetching better deals from creditors: Board busyness, agency relationships and the bank cost of debt
TL;DR: In a cross-country setting, this paper showed that busy boards of directors (i.e., outside directors with multiple directorships) enhance a bank's financing capacity by lowering its cost of debt, consistent with the signalling quality hypothesis.
References
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Journal ArticleDOI
Financial Intermediation and Delegated Monitoring
TL;DR: In this paper, the authors developed a theory of financial intermediation based on minimizing the cost of monitoring information which is useful for resolving incentive problems between borrowers and lenders, and presented a characterization of the costs of providing incentives for delegated monitoring by a financial intermediary.
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Bank governance, regulation and risk taking
TL;DR: In this paper, the authors conduct an empirical assessment of theories concerning risk taking by banks, their ownership structures, and national bank regulations, and show that bank risk taking varies positively with the comparative power of shareholders within the corporate governance structure of each bank.
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Government Ownership of Banks
TL;DR: In this paper, the authors show that government ownership is large and pervasive and higher in countries with low levels of per capita income, backward financial systems, interventionist and inefficient governments, and poor protection of property rights.
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Capital Regulation, Risk-Taking and Monetary Policy: A Missing Link in the Transmission Mechanism?
Claudio Borio,Haibin Zhu +1 more
TL;DR: In this paper, the authors argue that insufficient attention has so far been paid to the link between monetary policy and the perception and pricing of risk by economic agents - what might be termed the "risk-taking channel" of monetary policy.
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Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking
TL;DR: In this paper, a bank with a fragile capital structure, subject to runs, is identified as a potential source of illiquidity in a bank relationship lender, where the relationship lender may demand to liquidate early or require a return premium when she lends directly.