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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Competition and bank stability in the MENA region: The moderating effect of Islamic versus conventional banks
TL;DR: This article investigated the impact of competition on bank stability using data from 276 banks across eighteen MENA countries between 2006 and 2015, and found that the competitionfragility effect is more prominent for Islamic banks than conventional ones.
Journal ArticleDOI
Bank overall financial strength: Islamic versus conventional banks
TL;DR: In this article, the authors compared the performance of Islamic and conventional banks with the use of individual financial ratios or efficiency frontier techniques, and found that the difference of the overall financial strength between the two groups is not statistically significant.
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The impact of multi-layer governance on bank risk disclosure in emerging markets: the case of Middle East and North Africa
TL;DR: In this paper, the authors examined the impact of multi-layer governance mechanisms on the level of bank risk disclosure using a large dataset from 14 Middle East and North Africa (MENA) countries over a period of 8 years.
Journal ArticleDOI
Financial stability of Islamic banking and the global financial crisis: Evidence from the Gulf Cooperation Council
Faisal Alqahtani,David G. Mayes +1 more
TL;DR: In this paper, the authors examined whether Islamic banks outperformed conventional banks in the time of financial shocks during the period 2000-2013 and found that the difference between the two banking types was initially not significant during the GFC, but when the financial shock spread to the real economy during the later phases of the crisis, Islamic banks suffered a significantly higher level of financial instability than conventional banks.
Journal ArticleDOI
An Overview of Islamic Finance
TL;DR: The macroeconomic policy implications of the rapid expansion of Islamic finance are far reaching and need careful considerations as mentioned in this paper, and empirical evidence on the stability of Islamic banks is so far mixed.
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.
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.