Liquidity risk, credit risk and stability in Islamic and conventional banks

M. K. Hassan; A. Khan; Andrea Paltrinieri

doi:10.1016/j.ribaf.2018.10.006

Liquidity risk, credit risk and stability in Islamic and conventional banks

M. K. Hassan, A. Khan, Andrea Paltrinieri^*

^*Autore corrispondente per questo lavoro

Risultato della ricerca: Contributo in rivista › Articolo in rivista

32 Citazioni (Scopus)

Abstract

The aim of this paper is to provide a thorough assessment of Islamic banks’ (IBs) liquidity risk compared to conventional banks (CBs). We firstly investigate the relationship between liquidity and credit risk. Employing a simultaneous structural equation approach, on a comprehensive dataset of 52 IBs and CBs, from selected Organization of Islamic Cooperation Countries for the period of 2007–2015, we find that credit risk and liquidity risk have negative relationship. We then investigate the relationship between liquidity risk and stability, finding a negative relationship just for IBs. We finally show that Islamic banks are better than conventional in managing risks.

Lingua originale	English
pagine (da-a)	17-31
Numero di pagine	15
Rivista	Research in International Business and Finance
Volume	48
DOI	https://doi.org/10.1016/j.ribaf.2018.10.006
Stato di pubblicazione	Pubblicato - 2019

Keywords

Credit risk
Distance to De
Islamic banks
Liquidity risk
Stability
Z-score
fault

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10.1016/j.ribaf.2018.10.006

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title = "Liquidity risk, credit risk and stability in Islamic and conventional banks",

abstract = "The aim of this paper is to provide a thorough assessment of Islamic banks{\textquoteright} (IBs) liquidity risk compared to conventional banks (CBs). We firstly investigate the relationship between liquidity and credit risk. Employing a simultaneous structural equation approach, on a comprehensive dataset of 52 IBs and CBs, from selected Organization of Islamic Cooperation Countries for the period of 2007–2015, we find that credit risk and liquidity risk have negative relationship. We then investigate the relationship between liquidity risk and stability, finding a negative relationship just for IBs. We finally show that Islamic banks are better than conventional in managing risks.",

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year = "2019",

doi = "10.1016/j.ribaf.2018.10.006",

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T1 - Liquidity risk, credit risk and stability in Islamic and conventional banks

AU - Hassan, M. K.

AU - Khan, A.

AU - Paltrinieri, Andrea

PY - 2019

Y1 - 2019

N2 - The aim of this paper is to provide a thorough assessment of Islamic banks’ (IBs) liquidity risk compared to conventional banks (CBs). We firstly investigate the relationship between liquidity and credit risk. Employing a simultaneous structural equation approach, on a comprehensive dataset of 52 IBs and CBs, from selected Organization of Islamic Cooperation Countries for the period of 2007–2015, we find that credit risk and liquidity risk have negative relationship. We then investigate the relationship between liquidity risk and stability, finding a negative relationship just for IBs. We finally show that Islamic banks are better than conventional in managing risks.

AB - The aim of this paper is to provide a thorough assessment of Islamic banks’ (IBs) liquidity risk compared to conventional banks (CBs). We firstly investigate the relationship between liquidity and credit risk. Employing a simultaneous structural equation approach, on a comprehensive dataset of 52 IBs and CBs, from selected Organization of Islamic Cooperation Countries for the period of 2007–2015, we find that credit risk and liquidity risk have negative relationship. We then investigate the relationship between liquidity risk and stability, finding a negative relationship just for IBs. We finally show that Islamic banks are better than conventional in managing risks.

KW - Credit risk

KW - Distance to De

KW - Islamic banks

KW - Liquidity risk

KW - Stability

KW - Z-score

KW - fault

KW - Credit risk

KW - Distance to De

KW - Islamic banks

KW - Liquidity risk

KW - Stability

KW - Z-score

KW - fault

UR - http://hdl.handle.net/10807/177413

U2 - 10.1016/j.ribaf.2018.10.006

DO - 10.1016/j.ribaf.2018.10.006

M3 - Article

SN - 0275-5319

VL - 48

SP - 17

EP - 31

JO - Research in International Business and Finance

JF - Research in International Business and Finance

ER -

Liquidity risk, credit risk and stability in Islamic and conventional banks

Abstract

Keywords

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