This paper explores whether the impact of economic uncertainty on credit growth differs for Islamic vs. conventional banks. Using a sample of 416 banks (58 Islamic and 358 conventional) in 12 countries, the findings indicate that an increase in economic uncertainty significantly decreases the...

The current economic crisis stems from the US sub-prime crisis exacerbated by the practice of Credit Default Swap (CDS) – an insurance against default risk – whereby the buyer of CDS makes a series of payments to the seller in return for compensation if the debt instrument goes into default...