Financial Stability in Islamic Banking System the Capacity to React to Current World Wide Crisis

Parastoo Shajari and Bita Mohebikhah
Additional contact information
Parastoo Shajari : Monetary and Banking Research Institute (MBRI), Central Bank of the Islamic Republic of Iran (CBI)
Bita Mohebikhah : Ministry of Communication and Information Technology

Journal of Money and Economy, 2012, vol. 6, issue 4, 133-166

Abstract: This paper investigates the financial stability, measured by z-score technique in Islamic banking system of 20 countries from 2000 to 2010. We compare the stability of Islamic banks to the commercial banks, before and after the financial crisis. The empirical results from panel estimation show that: a) the large Islamic banks are more stable than the large commercial banks and furthermore, the small Islamic banks have lower z-score comparing to the small commercial banks. b) as past history shows, in general the financial crisis has a direct negative impact on stability of the large banks moreover, our study shows that after a financial crisis the small Islamic banks are more stable than large Islamic banks. c) there is no significant difference between stability in oil and non-oil producing countries, however results change between the small and large banks in the two groups of Islamic and commercial banks which tend to be more stable for oil producing countries.

Keywords: Islamic banks; Financial Stability; Financial Crisis; Oil Producing Countries (search for similar items in EconPapers)
JEL-codes: G21 G33 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://jme.mbri.ac.ir/article-1-27-en.pdf (application/pdf)
http://jme.mbri.ac.ir/article-1-27-en.html (text/html)

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:mbr:jmonec:v:6:y:2012:i:4:p:133-166

Access Statistics for this article

More articles in Journal of Money and Economy from Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran Contact information at EDIRC.
Bibliographic data for series maintained by M. E. ().