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

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

Risultato della ricerca: Contributo in rivistaArticolo 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 originaleEnglish
pagine (da-a)17-31
Numero di pagine15
RivistaResearch in International Business and Finance
Volume48
DOI
Stato di pubblicazionePubblicato - 2019

Keywords

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

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