Comparative analysis of financial risks towards financial stability of Islamic and conventional banks in GCC countries

Dependency of GCC countries on oil sector revenues exposes them to financial risks. This study aims to examine the banks’ financial stability and its determinants from financial risks perspective, to highlight the resilience of Islamic and conventional banks in the wake of economic vulnerabilities....

Full description

Saved in:

Bibliographic Details
Main Author:	Al-Wesabi, Hamid Abdulkhaleq Hasan
Format:	Thesis
Language:	eng eng eng
Published:	2022
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/10556/1/Depositpermission-not%20allow_s900103.pdf https://etd.uum.edu.my/10556/2/s900103_01.pdf https://etd.uum.edu.my/10556/3/s900103_02.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-uum-etd.10556
record_format	uketd_dc
spelling	my-uum-etd.105562023-07-16T00:54:40Z Comparative analysis of financial risks towards financial stability of Islamic and conventional banks in GCC countries 2022 Al-Wesabi, Hamid Abdulkhaleq Hasan Mohd. Yosuf, Rosylin Islamic Business School Islamic Business School HG Finance Dependency of GCC countries on oil sector revenues exposes them to financial risks. This study aims to examine the banks’ financial stability and its determinants from financial risks perspective, to highlight the resilience of Islamic and conventional banks in the wake of economic vulnerabilities. Financial risks affect the banking systems through deterioration of liquidity and asset quality as GCC financial systems are more reliant on banks than the non-banking institutions. This study shows the relationship between financial stability of the banks (measured by Z-Score Index and risk adjusted returns on assets and equity), and the financial risks as independent variables (namely: macroeconomic, industry-specific, and bank-specific variables). The method employed is panel cointegration analysis (Pedroni’s Method) and panel FM-OLS, D-OLS and FGLS estimation covering 2000 to 2017. The study also compares the financial stability and resilience, liquidity, capital, and efficiency between Islamic and conventional banks for the periods before, during and post financial crisis. The findings affirmed that there are differences, in the forms of impact, direction and significance of financial risks and banks’ financial stability, between Islamic and conventional banks, in terms of stability, inflation, crisis period impact, political instability, competition, financial sector development, credit risk, liquidity, capital and diversification. It shows the nature of banks matters to realize more financial stability and soundness against the effects of financial risks exposure. The findings also shed some light on whether similar policy ramifications can be implemented to mitigate risks in order to maintain the soundness and resilience of both Islamic and conventional banks. Thus, Central Banks and regulatory authorities should implement their policies accordingly, to avoid instability and future financial crises. Once the banking system is more resilient, economy of GCC countries will be less vulnerable to systemic risks of future financial crises and thus the economic development will be more sustainable. 2022 Thesis https://etd.uum.edu.my/10556/ https://etd.uum.edu.my/10556/1/Depositpermission-not%20allow_s900103.pdf text eng staffonly https://etd.uum.edu.my/10556/2/s900103_01.pdf text eng staffonly https://etd.uum.edu.my/10556/3/s900103_02.pdf text eng staffonly other doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng eng
advisor	Mohd. Yosuf, Rosylin
topic	HG Finance
spellingShingle	HG Finance Al-Wesabi, Hamid Abdulkhaleq Hasan Comparative analysis of financial risks towards financial stability of Islamic and conventional banks in GCC countries
description	Dependency of GCC countries on oil sector revenues exposes them to financial risks. This study aims to examine the banks’ financial stability and its determinants from financial risks perspective, to highlight the resilience of Islamic and conventional banks in the wake of economic vulnerabilities. Financial risks affect the banking systems through deterioration of liquidity and asset quality as GCC financial systems are more reliant on banks than the non-banking institutions. This study shows the relationship between financial stability of the banks (measured by Z-Score Index and risk adjusted returns on assets and equity), and the financial risks as independent variables (namely: macroeconomic, industry-specific, and bank-specific variables). The method employed is panel cointegration analysis (Pedroni’s Method) and panel FM-OLS, D-OLS and FGLS estimation covering 2000 to 2017. The study also compares the financial stability and resilience, liquidity, capital, and efficiency between Islamic and conventional banks for the periods before, during and post financial crisis. The findings affirmed that there are differences, in the forms of impact, direction and significance of financial risks and banks’ financial stability, between Islamic and conventional banks, in terms of stability, inflation, crisis period impact, political instability, competition, financial sector development, credit risk, liquidity, capital and diversification. It shows the nature of banks matters to realize more financial stability and soundness against the effects of financial risks exposure. The findings also shed some light on whether similar policy ramifications can be implemented to mitigate risks in order to maintain the soundness and resilience of both Islamic and conventional banks. Thus, Central Banks and regulatory authorities should implement their policies accordingly, to avoid instability and future financial crises. Once the banking system is more resilient, economy of GCC countries will be less vulnerable to systemic risks of future financial crises and thus the economic development will be more sustainable.
format	Thesis
qualification_name	other
qualification_level	Doctorate
author	Al-Wesabi, Hamid Abdulkhaleq Hasan
author_facet	Al-Wesabi, Hamid Abdulkhaleq Hasan
author_sort	Al-Wesabi, Hamid Abdulkhaleq Hasan
title	Comparative analysis of financial risks towards financial stability of Islamic and conventional banks in GCC countries
title_short	Comparative analysis of financial risks towards financial stability of Islamic and conventional banks in GCC countries
title_full	Comparative analysis of financial risks towards financial stability of Islamic and conventional banks in GCC countries
title_fullStr	Comparative analysis of financial risks towards financial stability of Islamic and conventional banks in GCC countries
title_full_unstemmed	Comparative analysis of financial risks towards financial stability of Islamic and conventional banks in GCC countries
title_sort	comparative analysis of financial risks towards financial stability of islamic and conventional banks in gcc countries
granting_institution	Universiti Utara Malaysia
granting_department	Islamic Business School
publishDate	2022
url	https://etd.uum.edu.my/10556/1/Depositpermission-not%20allow_s900103.pdf https://etd.uum.edu.my/10556/2/s900103_01.pdf https://etd.uum.edu.my/10556/3/s900103_02.pdf
_version_	1776103842023211008

Comparative analysis of financial risks towards financial stability of Islamic and conventional banks in GCC countries

Similar Items