We use a classic Merton credit risk framework to argue that Islamic Banking Institutions (IBIs) face less incentive to take on risks than Conventional Banking Institutions (CBI). IBIs have less incentive for risk shifting both in and outside of distress situations. We test and confirm this...

We use a classic Merton credit risk framework to argue that Islamic Banking Institutions (IBIs) face less incentive to take on risks than Conventional Banking Institutions (CBI). IBIs have less incentive for risk shifting both in and outside of distress situations. We test and confirm this...

Risk management is essential part of health of Islamic Bank (IB) and the health of entire financial market. One important tools in risk management to avoid the failure of a bank is the capital held by the bank. Understanding the importance of risk management and capital adequacy, Basel Committee...

Purpose - Using cross-country data on the 1,000 largest global banks for 2019, the paper aims to examine the response of bank risk and returns to the pandemic. Design/methodology/approach - The author employs weighted least squares (WLS) techniques for the purposes of analysis. Findings - The...

For most of the people the prohibition on interest is the well known part of Islamic finance. Indeed, the concept of Islamic finance was not being discussed enough till financial crisis, after crisis it started to be seen as an alternative financial system for conventional finance. Sharing the...

Modern Islamic financing was started in the last quarter of 20th century and got momentum in the first decade of 21st century. Global volume of assets under Islamic financial system, have reached to US$ 2,000/- billion by the end of December 2014 (MIFC-2015). Islamic financing is based on...

The coronavirus pandemic has led to unprecedented financial and economic disruptions worldwide. Academic interest in the topic of the COVID-19 outbreak has led to a rapid influx of publications on the subject matter from both Islamic and conventional finance and economic perspectives. This paper...

This study documents the literary developments and classifies the literature in the area of Islamic Financial Services Industry (IFSI). Our findings are based on articles published in selected Islamic finance specialized journals for six years (2012-2017). Classification is based on multiple...

We provide cross-country evidence from microfinance institutions (MFIs) that are Sharia-compliant and their comparisons with non-Sharia-compliant MFIs. We find that, compared with non-Sharia-compliant conventional MFIs, Sharia-compliant Islamic MFIs have less credit risk but are less profitable...