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- Title
Risk in Islamic Banking*.
- Authors
Abedifar, Pejman; Molyneux, Philip; Tarazi, Amine
- Abstract
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.
- Subjects
ISLAMIC finance; BANKRUPTCY costs; INTEREST rate risk; COMMERCIAL credit; FEDERAL funds market (U.S.); ECONOMIC development
- Publication
Review of Finance, 2013, Vol 17, Issue 6, p2035
- ISSN
1572-3097
- Publication type
Article
- DOI
10.1093/rof/rfs041