Risk in Islamic Banking

Abedifar, P. and Molyneux, P. and Tarazi, A. (2013) Risk in Islamic Banking. Review of Finance. DOI: 10.1093/rof/rfs041

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This article 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 Shariá-compliant financial products. Our results also show that loan quality of Islamic banks is less responsive to domestic interest rates compared to conventional banks.

Item Type: Article
Subjects: Research Publications
Departments: College of Business, Law, Education and Social Sciences > Bangor Business School
Date Deposited: 09 Dec 2014 16:46
Last Modified: 23 Sep 2015 03:08
ISSN: 1573-692X
URI: http://e.bangor.ac.uk/id/eprint/1000
Identification Number: DOI: 10.1093/rof/rfs041
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