Do Profit-sharing Investment Account Holders Provide Market Discipline in an Islamic Banking System?

Omar Alaeddin, Simon Archer, Rifaat Ahmed Abdel Karim and Mohamed Shah

Journal of Financial Regulation, 2017, vol. 3, issue 2, 210-232

Abstract: Market discipline is one of the main pillars of stability and resiliency in the banking system. The mechanism of market discipline primarily relies on the role of depositors who receive timely information and act accordingly through their respective accounts. In this study, we use generalized method of moments panel technique for 44 Islamic banks across different regions to research the presence of market discipline in the global Islamic banking system, focusing on the behaviour of the PSIA holders and their role in the governance of Islamic banks. These results have a significant policy implication in reviewing the framework governing the Islamic banks.

Keywords: market discipline; Islamic banks; PSIA (profit-sharing investment account); interactive dynamic mechanism (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1093/jfr/fjx006 (application/pdf)
Access to full text is restricted to subscribers.

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:oup:refreg:v:3:y:2017:i:2:p:210-232.

Access Statistics for this article

Journal of Financial Regulation is currently edited by Dan Awrey, Geneviève Helleringer and Wolf-Georg Ringe

More articles in Journal of Financial Regulation from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().