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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Unravelling Shariah audit practice in Saudi Islamic banks
TL;DR: In this article, a review of the limited literature on the practice of Shariah audit and expounds on its meaning and scope and explores issues on contemporary practice in Islamic banks is presented.
Journal ArticleDOI
The Future of Indonesia Islamic Banking Industry: Bankruptcy Analyzing the Second Wave of Global Financial Crisis
TL;DR: In this article, the resilience of the Indonesia Islamic banking industry from bankruptcy risk in times of financial crisis is analyzed using binary regression as dependent variable, which is used to predict bankruptcy using logistic regression model of the global financial crisis in Indonesia.
Journal ArticleDOI
The Effect of Macroeconomic and Bank-Specific Variables to Risk-Taking of Islamic Bank in Indonesia
TL;DR: In this paper, the authors delineate the relationship between macroeconomic factors and bank-specific variables to risk-taking of Islamic bank and conclude that the medium and small size of Islamic banks are more vulnerable from external shock.
Journal ArticleDOI
Determinants of Default Risks and Risk Management: Evidence from Rural Banks in Indonesia
TL;DR: In this paper, the authors investigate the determinants of default risk of rural banks in East Java, Indonesia using descriptive verification and logistic regression analysis, and find that net interest margin (NIM) as a proxy of market risk, non-performing loan (NPL), operation efficiency and return on assets (ROA) have a significant influence on default risk.
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Is Islamic Bank More Stable Than Conventional Bank? Evidence From Islamic Rural Banks in Indonesia
TL;DR: In this paper, the authors investigated whether Islamic rural banks perform better than conventional rural banks as their competitor in Indonesia and found that the Z-score of Islamic rural bank is higher than the Z -score of conventional rural bank.
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.