Islamic banks operate without involving interest, and therefore are believed to be less risky during the financial crisis than are conventional banks. This advantage may not be significant if government either partially or fully guarantees any bank deposit at certain level. In other words,...

Islamic banks operate without involving interest, and therefore are believed to be less risky during financial crises than conventional banks. This advantage may not be significant if the government either partially or fully guarantees bank deposits. In the presence of deposit insurance the...