The Effects of the Global Crisison Islamic and Conventional Banks: A Comparative Study

September 1, 2010

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Jemma Dridi, and Maher Hasan. The Effects of the Global Crisison Islamic and Conventional Banks: A Comparative Study, (USA: International Monetary Fund, 2010) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the performance of Islamic banks (IBs) and conventional banks (CBs) during the recent global crisis by looking at the impact of the crisis on profitability, credit and asset growth, and external ratings in a group of countries where the two types of banks have significant market share. Our analysis suggests that IBs have been affected differently than CBs. Factors related to IBs‘ business model helped limit the adverse impact on profitability in 2008, while weaknesses in risk management practices in some IBs led to a larger decline in profitability in 2009 compared to CBs. IBs‘ credit and asset growth performed better than did that of CBs in 2008-09, contributing to financial and economic stability. External rating agencies‘ re-assessment of IBs‘ risk was generally more favorable.

Subject: Banking, Commercial banks, Credit, Financial crises, Financial institutions, Financial services, Islamic banking, Islamic finance, Money

Keywords: Asset growth, Bank dummy, Commercial banks, Conventional banks, Credit, Credit growth, Financial crisis, Financial stability, Global, IB dummy, Investment portfolio, Islamic banking, Islamic banks, Islamic banks assets, Islamic finance, Market share, Mean test, Regression analysis, Toxic asset, WP

Publication Details

Pages:

46
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/201
Stock No:

WPIEA2010201
ISBN:

9781455205318
ISSN:

1018-5941

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