Has the adoption of Islamic banking model based on conventional bank values made Islamic banks less stable? A comparison with cooperative banks in Europe during the 2008 crisis
Despite the increase in studies on Islamic banks, there is a number of issues. Firstly, the comparison is with commercial banks although in reality, Islamic banks have strayed from their theoretical foundations of mutuality and profit-sharing. A more apt comparison is thus with cooperative banks, which share similar theoretical foundations with Islamic banks. Secondly, this comparison may unlock the stability puzzle for Islamic banks. While theoretically they are argued to be stabilising, empirically, the evidence is mixed. Several works concur with the notion of superior stability in Islamic compared to conventional banks but of late, there are increasing findings to the contrary. This study thus seeks to first ascertain whether in mimicking conventional banks, Islamic banks have become just as unstable, or worse, during the 2008 financial crisis and the 'new normal' years between 2010 and 2015 ...
Islamic banking model , Islamic banks , Conventional banks , Financial crisis 2008
Gulzar, R. (2018). Has the adoption of Islamic banking model based on conventional bank values made Islamic banks less stable? A comparison with cooperative banks in Europe during the 2008 crisis (Doctoral dissertation). INCEIF, Kuala Lumpur. Retrieved from https://ikr.inceif.org/handle/INCEIF/3149