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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Vulnerability of Islamic banking in ASEAN
TL;DR: In this article , the authors evaluated the impact of credit risk, liquidity risk, profitability, economic growth and good governance on the vulnerability of the Islamic banking system in the Association of Southeast Asian Nations (ASEAN).
Comparison of liquidity risk and credit risk stability of islamic banking and conventional
TL;DR: In this article, the authors examined the relationship between liquidity risk and credit risk using a descriptive statistical approach, the classic assumption test and use the Mann-Whitney U test to compare the performance of Islamic banks and conventional banks.
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Bank lending during the COVID-19 pandemic: A comparison of Islamic and conventional banks
TL;DR: In this paper , the authors used a sample of 421 banks from 17 countries and found that the lending growth of Islamic and conventional banks decreased during the initial phase of the COVID-19 crisis.
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Creditor Rights and Bank Capital Decisions: Conventional vs. Islamic Banking
Mohammad Bitar,Amine Tarazi +1 more
TL;DR: In this article, the authors provide evidence that stronger creditor rights are associated with higher capital adequacy ratios of conventional banks but not of Islamic banks, suggesting that bank managers tend to increase pure equity to signal better monitoring efforts and avoid losing control in an environment characterized by strong creditor protection.
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Credit default risk in Islamic and conventional banks: Evidence from a GARCH option pricing model
TL;DR: In this paper , the authors evaluate the credit default risk of Islamic banks using a GARCH option pricing model and find that Islamic banks are more resilient to financial market turmoil and less prone to failure than conventional banks.
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.