A comparative study of Islamic and conventional banks’ risk management practices: empirical evidence from Pakistan
Rehman, Asma Abdul
Dad, Aasim Munir
MetadataShow full item record
While conventional bank risk management practices are well documented in the literature, there is limited research devoted at comparing the risk management practices of Islamic and conventional banks and how the recent financial crisis affected the approach taken in each banking model to manage the risks. In this paper, we use self-administered questionnaire to collect data from 150 bank senior managers and risk specialists from Pakistani conventional and Islamic banks to identify the main contributing factors to their risk management practices after the 2007–2008 financial crisis. The study results reveal that risk identification, risk assessment and analysis, credit risk analysis and risk governance are the most efficient and influential variables in explaining the risk management practices of Islamic banks, while understanding risk management, credit risk analysis and risk governance are the most significant and contributing variables in the risk management practices of conventional banks. Differences are also observed between Islamic and conventional banks in their liquidity risk analysis and risk governance. The results presented in this study are likely to benefit bank managers, investors, regulators and policymakers as they will serve them as guide when developing, reformulating and overseeing the bank(s) existing risk management practices.
Journal of Banking Regulation;
Rehman, A.A., Benamraoui, A. and Dad, A.M. (2018) 'A comparative study of Islamic and conventional banks’ risk management practices: empirical evidence from Pakistan', Journal of Banking Regulation, pp.1-14. DOI: 10.1057/s41261-017-0046-z.
Article published in Journal of Banking regulation on 20 June 2017 (online), available at: https://doi.org/10.1057/s41261-017-0046-z.
Cardiff Metropolitan University (Grant ID: Cardiff Metropolian (Internal))
Showing items related by title, author, subject and abstract.
A comparative study of risk management practices between Islamic and conventional banks in Pakistan Rehman, Asma Abdul (Cardiff Metropolitan University, 2016)Purpose: The purpose of this research study is to investigate the extent to which banks are using risk management practices in dealing with various risks and to compare risk management practices between Islamic and ...
Human capital development in the UAE Islamic banking sector: addressing the challenges of Emiratisation Qambar, Amal Sabah Obaid (Cardiff Metropolitan University, 2015)The development of human capital often faces challenges due to skills gaps in the labour market and this is exacerbated by the distinctive differences between the skills gained through education and those required by the ...
Tammam, Aliaa Abdallah (Cardiff Metropolitan University, 2021)One of the key success elements of economic development is a well-established, banking system. This sector is often considered for mobilising savings as credit or investment tools. In addition, the banking system plays a ...