Financial Stability of Islamic Banks: A Review of the Literature

Authors

  • Akeem Kolawole Odeduntan Ahmed Zakari and Co. (Chartered Accountants)
  • Abideen Adeyemi Adewale International Islamic University Malaysia, Gombak, Kuala Lumpur

DOI:

https://doi.org/10.13135/2421-2172/848

Keywords:

Global Financial Crisis, Financial Stability, Islamic Finance

Abstract

The recent global financial crisis that began in the US and spread sporadically to other parts of the world has been a sort of awakening that financial stability of financial institutions has to be on check from time to time. This scenario has called for a concerted effort that may possibly be geared towards introducing a framework or policy that tends to promote and sustain economic growth and stability. The present paper therefore reviews financial stability of banks by surveying the extant literature on the subject. It employs library method to gather information and further analyse it by way of comparative, inductive and deductive methods. The paper establishes that while some Islamic banks are relatively stable in terms of their financial activities, some banks are not. 

Author Biographies

Akeem Kolawole Odeduntan, Ahmed Zakari and Co. (Chartered Accountants)

Islamic Finance Unit

Abideen Adeyemi Adewale, International Islamic University Malaysia, Gombak, Kuala Lumpur

Asst. Professor
Kulliyah of Economics and Management Science.

References

AbdiAbdirahman Mohamed (2011). Islamic Banking: Steady in shaky time? George Maron University, ProQuest, UMI Dissertations Publishing: Ann Arbor

Adrian, Blundell-Wignal. (2011). Bank Competition and Financial Stability. OECD

Alawode, Abayomi A. and Al Sadek, Mohammed (2008). What is Financial Stability. Financial Stability Paper Series No. 1, Central Bank of Bahrain

Ali AbdElrahmanElzahiSaaid (2012). Islamic Banking Structures: Implications for Risk and Financial Stability. Islamic Research and Training Institute (IRTI). Vol. 20, No. 2

Allen, W. A. and Wood G. (2006). Defining and Achieving financial stability. Journal of Financial Stability. Vol. 2, pp 152-172

Beck Thornsten, Demirguc-KuntAsli and MerroucheOuarda (2010). Islamic vs. Conventional Banking: Business model, Efficiency and Stability. Policy Research Working Paper 5446. World Bank

Chant, J. (2003). Financial Stability as a Policy Goal. In Essays on Financial Stability, Technical Report No. 95, Bank of Canada

Chapra Umer M. (2005). Financial Stability: The role of paradigm and support institutions In Khan Tariqullah and Muljawan Dadang (ed.), Islamic Financial Architecture: Risk Management and Financial Stability (ed.) Islamic Research and Training Institute. pp 119-132

Cihak Martin, Munoz Sonia, Sharifuddin ShakiraTeh and Tintcher Kalin (2012). Financial Stability Reports: What Are They Good For? IMF Working Paper WP/12/1

Cihak Martin and Hesse Heiko (2008). Islamic Banks and Financial Stability: An Empirical Analysis. IMF Working Paper WP//08/16

Farook Sayd and Hassan Kabir M. And Clinch Gregory (n.d). Islamic Banks and Financial Stability: Further Evidence

Ferguson, R., (2003). Should financial stability be an explicit bank objective? In Monetary Stability, Financial Stability and the Business Cycle: Five Views, BIS Paper No. 18 pp 7-15

Foot, M., (2003). What is financial stability and How do we get it. The Roy Bridge Memorial Lecture, Financial Services Authority

Hossein Askari (2012). Islamic Finance, Risk-sharing and International Financial Stability. Yale Journal of International Affairs.

Hussein Kassim (2010). Bank-level Stability Factors and Consumer Confidence – A Comparative Study of Islamic and Conventional Banks’ Product Mix. Journal of Financial Services Marketing. Vol.15, No.3, pp 259-270. Macmillan Publishers Ltd

Hussein, Khaled A. (2004). Bank Efficiency in Bahrain: Islamic vs Conventional Banks. IRTI Research paper. Jeddah: King Fahd National Library Catalogoing-in-Publication Data

Ismail Jabir Shu’ayb (2010). The Concept of Islamic Banking. Alukah (n.p.)

Khan Tariqullah and Muljawan Dadang (2005). Islamic Financial Architecture: Risk Management and Financial Stability (ed.) Islamic Research and Training Institute.

Maher Hasan and Dridi Jemma (2010). The Effects of the Global Crisis on Islamic and Conventional Banks: A comparative Study. IMF Working Paper

Monzer Kahf (2007). Islamic Banks and Economic Development. In Handbook of Islamic Banking edited by M. Kabir Hassan and Mervyn K. Lewis. Edward Elgar Publishing Limited: UK

Najjar Naser J. (2013). Can Financial Ratios Reliably Measure the Performance of Banks in Bahrain? International Journal of Economics and Finance. Vol.5, No.3

Onakoya Adegbemi Babatunde and Onakoya Adekola Olaitan (2013). The Performance of Conventional and Islamic Banks in the United Kingdom: A comparative Analysis. Journal of Research in Economics and International Finance (JREIF). Vol.2, No.2 pp 29-38

Rajhi Wassim (2012). Islamic Banks and Financial Stability. LAP LAMBERT Academic Publishing: Deutschland

Schinazi, Garry J. (2007). Understanding Financial Stability: Towards a Practical Framework. IMF Working Paper

Schinazi, Garry J. (2004). Defining Financial Stability. IMF Working Paper WP/04/187

Shahid Muhammad Ali and Abbas Zaheer (2012). Financial Stability of Islamic Banking in Pakistan: An Empirical Study. African Journal of Business Management. Vol. 6 (10), pp 3706-3714

Siddiqi, Mohammad Nejatullah (2006). Islamic Banking and Finance in Theory and Practice: A survey of state of the Art. Islamic Economic Studies. Vol 13, No. 2

Sitti Rohaya Mat Rahim, Norsilawati Mohd Hassan and Roza Hazli Zakaria (2012). Islamic Vs. Conventional Bank Stability: A case study of Malaysia. PERKEM VII: Perak.

Tabash Mosab I. and Dhankar Raj S. (2014). The Impact of Global Financial Crisis on the Stability of Islamic Banks: An Empirical Evidence. Journal of Islamic Banking and Finance. Vol. 2, No. 1, pp. 367-388

The financial stability and payment system report (2011) of the Bank Negara Malaysia (Central Bank of Malaysia), Kuala Lumpur

Umar Islam Muhammad and Kozokov Shakhboz (2009). Stability of Islamic and Conventional banks, an empirical comparative analysis.

Wahida Ahmed and Robin H. Luo (2010). Comparison of Banking Efficiency in Europe: Islamic versus Conventional Banks, In Suk-Joong Kim and Micheal D. Mckenzie (ed.) International Banking in the New Era: Post-Crises Challenges and Opportunities, International Finance Review, Vol. 11, Emerald Group Publishing Limited, pp 361-389

Zairy Zainol and Salina Hj Kassim (2012). A Critical Review of the Literature on the rate of Return Risk in Islamic Banks. Journal of Islamic Accounting and Business Research. Vol.2, No.2. Emerald Group Publishing Limited

Downloads

Published

2015-06-19

How to Cite

Odeduntan, A. K., & Adewale, A. A. (2015). Financial Stability of Islamic Banks: A Review of the Literature. European Journal of Islamic Finance, (2). https://doi.org/10.13135/2421-2172/848

Issue

No. 2 (2015): EJIF - European Journal of Islamic Finance, 2, 2015

Section

Peer-reviewed Articles

License

Authors keep the copyrights for their work and give the journal the work's first publication copyright, which is at the same time licensed under a Creative Commons License – Attribution, which in turn allows other parties to share the work with an acknowledgement of the work's authorship and initial publication in this journal.

Similar Articles

<< < 3 4 5 6 7 8 9 10 11 12 > >> 

You may also start an advanced similarity search for this article.