The Nature of Islamic Banking and Solvency Stress Testing - Conceptual Considerations

Author/Editor:

Andreas A. Jobst ; Juan Sole

Publication Date:

August 7, 2020

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

This paper provides a conceptual overview of key aspects of the design and implementation of solvency stress testing of Islamic banks. Based on existing regulatory standards and prudential practice, the paper explains how Islamic finance principles and their impact on various risk drivers affect the capital assessment of asset-oriented financial intermediation under stress. The formal specification of these risk factors helps operationalize and integrate the stress testing of Islamic banks within established frameworks for financial stability analysis.

Series:

Working Paper No. 20/156

Frequency:

regular

English

Publication Date:

August 7, 2020

ISBN/ISSN:

9781513550886/1018-5941

Stock No:

WPIEA2020156

Format:

Paper

Pages:

77

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