EconPapers    
Economics at your fingertips  
 

Economy Downturn, Islamic Banking and the Indirect Consequences of the Global Financial Crisis

Faisal Alqahtani ()
Additional contact information
Faisal Alqahtani: Taibah University, Al Madinah, Kingdom of SAUDI ARABIA

Review of Economics & Finance, 2018, vol. 12, 72-87

Abstract: This paper theoretically reviews at different micro-levels some properties of Islamic banking that might have been negatively affected by economic downturn, namely, at the sector, operations and contract level. The discussion of the Selected Literature argues that while Islamic banking might have remained in a relatively better position compared to the conventional banking during the early phases of the crisis, they were less likely to continue outperforming their counterparts in conventional banking during the sequent economy downturn. This is largely due to their nature of evolving, scale-disadvantage, complex instruments and lax risk-mitigation tools available to them. That is, Islamic banks are exposed to a higher degree of risk, as well as many different and unique types of risk and possess few risk-mitigation tools, which could lead them to be relatively more vulnerable to financial shocks.

Keywords: Islamic banking; Global financial crisis (GFC); Gulf Cooperation Council (GCC); Operating performance (search for similar items in EconPapers)
JEL-codes: G01 G21 G28 Z12 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.bapress.ca/ref/ref-article/1923-7529-2018-02-72-16.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bap:journl:180206

Ordering information: This journal article can be ordered from
17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada

Access Statistics for this article

Review of Economics & Finance is currently edited by H. Carlson

More articles in Review of Economics & Finance from Better Advances Press, Canada 17 Alton Towers Circle, Unit 101 Toronto, ON, M1V3L8, Canada.
Bibliographic data for series maintained by Carlson ().

 
Page updated 2018-06-23
Handle: RePEc:bap:journl:180206