Stability of islamic and conventional banks during the financial crisis 1 ratio analysis the performance and the stability of banks can be quantified and measured through the analysis of their financial ratios. Stability of islamic and conventional banks, an empirical comparative analysis wahida ahmed and robin h luo (2010) comparison of banking efficiency in europe: islamic versus conventional banks, in suk-joong kim and micheal d mckenzie (ed) international banking in the new era: post-crises challenges and opportunities, international finance. The study covers a sample of 11 islamic banks (ibs) and 17 conventional banks (cbs) for three major regions (the gcc, the mediterranean and the mena) for the period from (09/11/ 2005 to 09/12/2013) our major findings are as follows.
The stability comparison between islamic banks and conventional banks: evidence in indonesia, paper presented at the proceedings of the 8th international conference on islamic economics and finance, 19-21 december, doha, qatar. Islamic banks are characterised by the compliance to islamic laws and practices, the main ones being the prohibition of interest and loans trading remarkably, during the 2008-2009 financial crisis, when a large number of conventional banks have announced bankruptcy, no single islamic bank failure. The objective of this study is measure and compare the financial stability of islamic and conventional banks operating in turkey for the period of 2006 to 2013the sample consist of twenty four banks, including four islamic banks and twenty.
Islamic banks have recorded high growth rates in both size and number and operate in over 60 countries worldwide and bankers predict that islamic banking could have control over 50% of savings in the islamic countries within the. This empirical study is concerned with examining and comparing the financial stability of a sample of jordanian islamic and conventional banks listed in amman stock exchange pre and posts the financial crisis, using the daily returns for the period (02/01/2005 to 26/01/2010. In analysis, five large conventional banks, five islamic banks and five small conventional banks were selected from pakistan and based on the average values of ratios and empirical analysis using statistical tools it was resulted that islamic banks were more economically secure than both huge and small conventional banks. 2) justification of the research: i the research will define, show and explain the short history of islamic and conventional banks ii this research will show the comparison of islamic and conventional banks iii the research will show roles and activities of islamic and conventional banks in the community iv. The impact of bank size on the stability in islamic banks and conventional banks they used the z-score as a measure of stability and found that financially, small islamic banks tend to be stronger than small conventional banks, large islamic banks tend to be weaker than large conventional banks, and small islamic banks tend to be stronger than large islamic banks.
Table 4 gives a general overview about the stability of islamic and conventional banks over 2006-2013 on average, islamic banks have a higher z-score than. A comparison between islamic and conventional banks meriem djennas, mohamed benbouziane and mustapha djennas 87 chapter 6 the stability comparison between islamic banks and. The comparative stability of islamic and conventional banks during financial crisis proxy year 2008 the current financial crisis has raised concerns, regarding the stability of financial.
The aim of this study is to compare the efficiency and stability of islamic and conventional banks in 14 mena countries over the period 1990-2010 using both the static frontier analysis (sfa) and the dea. Islamic banking vs conventional banking in most islamic countries, they tend to practice two types of financing in banking industry which are conventional and islamic banking the country like in malaysia has successfully developed an islamic banking system that operates in parallel with the conventional banking system. Abstract this study examines the behaviour of key bank level stability factors of liquidity, capital, risk-taking and consumer confidence in islamic and conventional banks which operate in the same market. Islamic banks contributed to financial and economic stability during the crisis, given that their credit and asset growth was at least twice as high as that of conventional banks. In many majority muslim countries, islamic banking assets have been growing faster than conventional banking assets there has also been a surge of interest in islamic finance from non-muslim countries such as the uk, luxembourg, south africa, and hong kong.
Degree of stability is low in islamic banks than conventional banks islamic banks allocate a large number of shares of their assets to generate financing than conventional banks. Are islamic banks more stable than conventional banks cihak and hesse (2010) : compare the stability of ibs relatively to cbs in a cross-country analysis during the period 1993-2004 : small ibs small cbs large cbs large ibs small ibs large ibs resilience to the recent global crisis : although ibs have illustrated a degree of. There is a difference in 'variable' definition under islamic and conventional banks for the calculation of the nsfr of islamic banks, we need data on islamic products based on the underlying islamic financial contract (eg musharkah or mudarbah.
Deepened islamic banking system, the impact of an islamic banking system on the effect of legal origin as a determinant of economic development, and changes in these effects over time (ie, between 1960 and 2006. Comparing conventional and islamic banks and controlling for other bank and country characteristics, the authors find few significant differences in business orientation, efficiency, asset quality, or stability. Highlights we compare conventional and islamic banks across 22 countries with both bank types islamic banks are less efficient, but intermediate more, especially during crises during crises, islamic banks are better capitalized, with lower loan losses recent stock performance of islamic banks due to more capital and lower loan losses. The purpose of this article is therefore to test and compare the financial stability of islamic and conventional banks during the 2007 subprime crisis to this end.
The data includes 323 banks (43 islamic, 242 conventional, and 38 socially responsible banks [srbs]) from around the world, covering 37 countries the statistical methods to find the determinants are ordinary least square (ols) and fixed effects model (fem. The conventional and islamic banking activities will enable qatar central bank to have a systematic framework of liquidity management and improve the efficiency of open market operations. 124 comparative study on performance of islamic and conventional banks presence of significant relationship in movement of selected financial indicators.