Islamic Banks and Financial Stability: An Empirical Analysis
AbstractThe relative financial strength of Islamic banks is assessed empirically based on evidence covering individual Islamic and commercial banks in 18 banking systems with a substantial presence of Islamic banking. We find that (i) small Islamic banks tend to be financially stronger than small commercial banks; (ii) large commercial banks tend to be financially stronger than large Islamic banks; and (iii) small Islamic banks tend to be financially stronger than large Islamic banks, which may reflect challenges of credit risk management in large Islamic banks. We also find that the market share of Islamic banks does not have a significant impact on the financial strength of other banks.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 08/16.
Date of creation: 01 Jan 2008
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Other versions of this item:
- Martin Čihák & Heiko Hesse, 2010. "Islamic Banks and Financial Stability: An Empirical Analysis," Journal of Financial Services Research, Springer, vol. 38(2), pages 95-113, December.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-03-01 (All new papers)
- NEP-BAN-2008-03-01 (Banking)
- NEP-CWA-2008-03-01 (Central & Western Asia)
- NEP-FDG-2008-03-01 (Financial Development & Growth)
- NEP-RMG-2008-03-01 (Risk Management)
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