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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Conventional vs Islamic banking and macroeconomic risk: Impact on asset price bubbles
TL;DR: In this article, the authors examined how the liability side of Islamic banks is impacted by the risk in the macro economy and found that the macroeconomic risk has a significant, positive impact on conventional bank deposits, while its impact on Islamic banks' deposits is either negative or significantly lower than their conventional counterparts.
Journal ArticleDOI
Factors Influence Financial Sustainability Banking In Indonesia
TL;DR: In this paper, the authors used the tree classification method to determine the factors that affect the financial sustainability of conventional banks and sharia banks in Indonesia, and the results showed that three financial performance factors affect financial sustainability, namely ROA, LTA, and DTA.
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Islamic Banks’ Stability: Full-Fledged vs Islamic Windows
TL;DR: In this paper, the authors investigated whether Islamic windows have better stability than full-fledged Islamic banks and concluded that Islamic windows are less stable than their full-scale counterparts, and they also suggested that Islamic window banks could enjoy their market position to maintain stability without converting themselves into fullfledged banks because the Islamic banking market's current condition is highly competitive.
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Do institutions, religion and the economic cycle impact bank stability in dual banking systems?
TL;DR: In this paper , the authors investigated the relationship of institutional quality, religion, and economic cycles to bank stability using a sample of 254 banks, including Islamic (IBs) and conventional banks (CBs), located in nine countries (QISMUT+3) that follow dual banking systems.
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Credit risk pricing and the rationality of lending decision-making within dual banking systems: A parametric approach
TL;DR: In this article, the authors assess and compare the perceived price of the credit risk of Islamic and conventional banks operating in 9 countries from the Middle East and Asia, using a quadratic directional distance function.
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.