Risk exposure during the global financial crisis: the case of Islamic banks
Purpose – The purpose of this paper is to examine the way Islamic financial institutions dealt with the recent financial problems in terms of risk management. Design/methodology/approach – In total, 27 Islamic banks and the same number of conventional banks selected from a wide range of countries around the world were analyzed. The capital ratios, based on the Basel Committee, are the primary tools used to analyze the riskiness of the Islamic and conventional banks. The focus on capital ratios is relevant in light of changes in banks' balance sheets due to significant write offs that caused a huge credit crunch in the western world. Capital ratios are considered as a reliable source in predicting potential bankruptcies. Findings – The paper shows that Islamic banks are maintaining better capital ratios than to their conventional counterparts. Originality/value – The paper presents a new approach to the comparative performance of Islamic and conventional banks in terms of risk management. The research design as well as the findings can be very useful to academicians and banking professionals alike.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 3 (2010)
Issue (Month): 4 (November)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://emeraldgrouppublishing.com/products/journals/journals.htm?id=imefm Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kuran, Timur, 2005. "The logic of financial westernization in the Middle East," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 593-615, April.
- M. Mansoor Khan & M. Ishaq Bhatti, 2008. "Islamic banking and finance: on its way to globalization," Managerial Finance, Emerald Group Publishing, vol. 34(10), pages 708-725.
- 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.
- Martin CihÃ¡k & Heiko Hesse, 2008. "Islamic Banks and Financial Stability; An Empirical Analysis," IMF Working Papers 08/16, International Monetary Fund.
- Arturo Estrella & Sangkyun Park & Stavros Peristiani, 2000. "Capital ratios as predictors of bank failure," Economic Policy Review, Federal Reserve Bank of New York, issue Jul, pages 33-52.
- Bashir, Abdel-Hameed M., 1999. "Risk And Profitability Measures In Islamic Banks: The Case Of Two Sudanese Banks," Journal of Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 6, pages 1-24.
When requesting a correction, please mention this item's handle: RePEc:eme:imefpp:v:3:y:2010:i:4:p:321-333. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Louise Lister)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.