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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The governance, risk-taking, and performance of Islamic banks
TL;DR: In this paper, the authors examined whether the difference in governance structures influenced the risk taking and performance of Islamic banks compared to conventional banks and concluded that the governance structure in Islamic banks plays a crucial role in risk taking as well as financial performance that is distinct from conventional banks.
Journal ArticleDOI
Of Religion and Redemption: Evidence from Default on Islamic Loans
TL;DR: In this article, the authors compare default rates on conventional and Islamic loans using a comprehensive monthly dataset from Pakistan that follows more than 150,000 loans over the period 2006:04 to 2008:12.
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Sukuk vs. conventional bonds: A stock market perspective
TL;DR: In this paper, the authors investigate whether stock market investors react differently to the announcements of sukuk and conventional bond issues, and they find that the stock market is neutral to announcements of conventional bonds issues, but it reacts negatively to announcement of SUkuk issues.
Journal ArticleDOI
A contemporary survey of islamic banking literature
M. Kabir Hassan,Sirajo Aliyu +1 more
TL;DR: This article reviewed empirical studies on Islamic banking and concentrates on their main findings while highlighting future research directions, and discusses scholars' concerns that have led to a paradigm shift in the system and highlight practitioners' disquiet about recent practices.
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Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research
TL;DR: In this article, the authors examine the recent empirical literature in Islamic banking and finance, highlight the main findings and provide a guide for future research, concluding that there are no major differences between Islamic and conventional banks in terms of their efficiency, competition and risk features.
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Posted Content
Islamic Financial Institutions and Products in the Global Financial System: Key Issues in Risk Management and Challenges Ahead
V. Sundararajan,Luca Errico +1 more
TL;DR: The recent establishment of the Islamic Financial Services Board, facilitated by the IMF, addresses these needs as mentioned in this paper and provides an enabling operational environment for Islamic finance by providing a more suitable regulatory framework and new financial instruments and institutional arrangements.
Journal ArticleDOI
Factors affecting bank risk taking: Evidence from Japan
Masaru Konishi,Yukihiro Yasuda +1 more
TL;DR: In this paper, the authors examined the determinants of risk taking at commercial banks and found that the implementation of the capital adequacy requirement reduced risk taking in commercial banks, and that the acceptance of retired government officials on banks' boards has an insignificant effect on bank risk.
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Are scale economies in banking elusive or illusive?: Evidence obtained by incorporating capital structure and risk-taking into models of bank production
TL;DR: In this paper, the authors explored how to incorporate banks' capital structure and risk-taking into models of production and found that when the bank's objective is defined as value maximization, it can be seen as incorporating both market-priced risk and expected cash flow into managers' ranking and choice of production plans.
Journal ArticleDOI
The Past, Present, and Probable Future for Community Banks
TL;DR: In this article, a simple theoretical framework for analyzing how deregulation, technological advance, and increased competitive rivalry have affected the size and health of the United States community banking sector and the quality and availability of banking products and services.
Journal ArticleDOI
The Past, Present, and Probable Future for Community Banks
TL;DR: In this article, the authors present a comprehensive view of the community banking sector in the U.S. in three parts: a review of the past three decades of change, with a special focus on how deregulation, technological advance, and increased competitive rivalry have affected the size and health of community banks.