Cooperative and Islamic Banks: What can they Learn from Each Other?

 
Author/Editor: Saeed Al-Muharrami ; Daniel C. Hardy
 
Publication Date: August 26, 2013
 
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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: Islamic and cooperative banks such as credit unions are broadly similar in that they both share some risk with savers. However, risk sharing goes along with ownership control in cooperatives, whilst Islamic banks share risk with borrowers and downside risk with depositors. Islamic banking is consistent with mutual ownership, which may ease some of the governance and efficiency concerns implied by Shari’ah constraints. Greater risk sharing among cooperative bank stakeholders, using mechanisms embedded in Islamic financial products, may strengthen cooperatives’ financial resilience.
 
Series: Working Paper No. 13/184
Subject(s): Islamic banking | Banks | Financial instruments | Financial institutions | Corporate governance

 
English
Publication Date: August 26, 2013
ISBN/ISSN: 9781484380833/2227-8885 Format: Paper
Stock No: WPIEA2013184 Pages: 31
Price:
US$18.00 (Academic Rate:
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