Bank lending during the COVID-19 pandemic: A comparison of Islamic and conventional banks

Narjess Boubakri, Ali Mirzaei and Mohsen Saad

Journal of International Financial Markets, Institutions and Money, 2023, vol. 84, issue C

Abstract: Using a sample of 421 banks from 17 countries, we find that the lending growth of Islamic and conventional banks decreased during the initial phase of the COVID-19 crisis. However, the decrease is significant for conventional banks only. Credit growth for Islamic banks grew around 2.5% faster than that for conventional banks, especially in countries with a macroprudential framework in place in the year leading up to the crisis. Our evidence remains unchanged with alternative empirical methodologies, definitions of bank lending, variations in the pre-crisis period, and proxies for the severity of COVID-19 in different countries.

Keywords: COVID-19; Bank performance; Islamic banks; Macroprudential policies; Bank lending; Credit growth (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:84:y:2023:i:c:s1042443123000112

DOI: 10.1016/j.intfin.2023.101743

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