ARE ISLAMIC BANKS MORE RESILIENT TO GLOBAL FINANCIAL CRISIS THAN CONVENTIONAL BANKS?
Journal Title: Asian Economic and Financial Review - Year 2014, Vol 4, Issue 7
Abstract
Development of global finance in recent years is marketed with the fastest growth in Islamic finance. The recent global financial crisis is characterized by the failure of a number of conventional banks. This led many researchers to reexamine the efficiency of Islamic banks compared to conventional ones and to study their capacity to resist to the financial crisis.The objective of our analysis is to study if Islamic banks are more resilient than conventional banks to the recent global financial crisis. To do this, two empirical investigations are proposed. The first one is based on the equality mean test. We compare the performance of IBs and CBs during global crisis (2007-2008) and after the crisis (2009-2010) in term of profitability, liquidity, efficiency, capital adequacy and leverage. The second investigation uses the Z-score as an indicator of bank stability in order to study the impact of the crisis on IBs and CBs. The main result derived from the first empirical test show that, when we consider the two periods, IBs become less profitable, more prone to credit risk and less efficient than CBs in the post crisis period. From the second investigation, we conclude that small banks fared better than large ones, IBs are less financially stable than CBs and large IBs perform better than large CBs, as suggested by Cihak and Hesse (2008).
Authors and Affiliations
Feryel Ouerghi| UR EMF (University of Tunis El Manar) & ESSECT (University of Tunis)
Keywords
Related Articles
- EP ID EP2056
- DOI -
- Views 467
- Downloads 26
Islamic Financial in the Global Financial System
This paper investigates the question of whether the phenomenon of Islamic finance who based on Shariah, or Islamic law is truly globalizing and spreading as a universal system of finance and banking. The paper also addre...
THE SHORT- AND LONG-TERM EFFECTS OF TRADE TAXES ON VERTICAL SPECIALIZATION
The aim of this study is to evaluate the effects of taxes on international trade in the short- and long-term on vertical specialization in the case of Turkey, which signed the GATT agreement and entered into the customs...
AN EMPIRICAL VALIDATION OF FAMA AND FRENCH THREE-FACTOR MODEL (1992, A) ON SOME US INDICES
The study of mean returns of American stocks showed a poor β coefficient of the Sharpe (1964) and Lintner (1965) capital asset pricing model or the consumption coefficient of Breeden (1979); Reinganum (1981) and Breeden...
EFFECTS OF FOCUS OF ACCOUNTING RESEARCH ON THE QUALITY OF ACCOUNTING EDUCATION IN MALAYSIAN UNIVERSITIES
This paper reviews the impact of focus of research in accounting on the quality of accounting education in Malaysian Universities. Research in accounting is very important in Malaysian Universities, in particular, and t...
MODERATING EFFECT ON THE RELATIONSHIP BETWEEN A COMPANIES’S LIFE CYCLE AND THE RELEVANCE OF ACCOUNTING PRACTICES INTANGIBLE ASSETS
The main objective of this study was to investigate the relationship between the company and the value relevance of intangible assets during the life cycle before and after the implementation of the accounting standard N...