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
Citations
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The crossroads of ESG and religious screening on firm risk
TL;DR: In this article, a large and extended global dataset of non-financial firms (4624 listed entities from 2002 to 2018) was used to provide the first empirical evidence on how ESG and Sharia screenings interact and influence market risks.
Journal ArticleDOI
Financial stability efficiency of Islamic and conventional banks
TL;DR: This article employed a meta-frontier stability function approach based on stochastic frontier framework to estimate financial stability efficiency of both bank groups, drawing on a sample of Islamic and conventional banks from 28 countries over the period 2003-2018.
Journal ArticleDOI
Firm valuations and board compensation: Evidence from alternative banking models
TL;DR: In this article, the authors examined whether the board of directors' compensation schemes affect stock market valuations for banks in a dual banking system (i.e., Islamic and conventional banks) employing an international sample of 11 countries for the period 2010-2015.
Journal ArticleDOI
Beyond common equity: The influence of secondary capital on bank insolvency risk
TL;DR: In this article, the authors examined if bank insolvency is sensitive to capital other than common equity for a sample of listed North American and European banks, finding that low regulatory capital buffers are associated with increased insolvencies risk for banks holding greater quantities of non-core tier 1 and tier 2 capital.
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Bank governance and crisis-period efficiency: A multinational study on Islamic and conventional banks
TL;DR: In this article, the authors examined the effect of dual board governance mechanisms (Shariah supervisory board and regular board of directors) on technical efficiency and whether the effect varies between normal times and global financial crisis period.
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.
Journal ArticleDOI
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.
Journal ArticleDOI
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.
Journal ArticleDOI
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.
Journal ArticleDOI
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.