-fledged Islamic banks (IBs) are indeed more stable than conventional banking institutions (CBIs), and are better capitalized than … loss provisioning. Similar results obtain for Islamic windows of mixed banks compared with conventional windows. The … analysis suggests that the loss absorption capacity of Islamic banks leads to less risk taking and a more stable banking system. …

-fledged Islamic banks (IBs) are indeed more stable than conventional banking institutions (CBIs), and are better capitalized than … loss provisioning. Similar results obtain for Islamic windows of mixed banks compared with conventional windows. The … analysis suggests that the loss absorption capacity of Islamic banks leads to less risk taking and a more stable banking system. …

This paper deals with the relation between excessive risk taking and capital structure in banks. Examining a quarterly … dataset of U.S. banks between 1993 and 2010, we find that equity is valued higher when more risky portfolios are chosen when … leverage is high, and that more risk taking has a negative impact on valuation of the debt of highly leveraged banks. We find …