No abstract

No abstract

In this paper, we consider the levels of credit risk in Islamic and conventional banks. One problem with existing studies is the use of accounting information alone to assess credit risk, and this could be especially misleading with Islamic banking. Using a market-based credit risk measure, Merton's distance-to-default (DD) model, we evaluate the credit risk of 156 conventional banks and 37 Islamic banks across 13 countries between 2000 and 2012. We also calculate the accounting information-based Z-score and nonperforming loan (NPL) ratio for the purpose of comparison. Our results show that Islamic banks have significantly lower credit risk than conventional banks as based on DD. In contrast, and as expected, Islamic banks display much higher credit risk using the Z-score and NPL ratio. These findings suggest that the measure chosen plays a significant role in assessing the actual credit risk of Islamic banks. JEL classification: G21; G32

The 'competition-stability/fragility' nexus is one of the more debated issues in the banking literature. However, while there is ample evidence concerning the relationship between competition and stability/fragility in different countries and regions, no prior study investigates this in the context of Islamic and conventional banks. We do this using data on both types of banks drawn from 16 developing economies over the period 2000-12. We measure the lack of competition using the Lerner index, and stability using both accountingbased measures, comprising the Z-score and the nonperforming loan ratio, and market-based measures, including Merton's distance to default. We employ panel vector autoregression and two-stage quantile regression to estimate the relationship. Our results lend support to the competition-fragility hypothesis in both Islamic and conventional banks. We also find the magnitude of the market power effect on stability is greater for conventional banks than Islamic banks. Lastly, banks in the median quantile of stability have a greater ability to reduce credit risk through gaining market power than banks in the lower and upper quantiles.

No abstract

No abstract

Using long-term district-level climate data and a case study from a drought-prone village in western Bangladesh, this research explores trends in climate change, and analyses farmers' adaptation dynamics, profitability and risks. This is the first study of its kind for drought-prone areas in Bangladesh.District-level temperature trended upwards across all seasons except in winter, while rainfall patterns were more episodic with persistent dry periods. Farmers' adaptation measures included changes in cropping systems, cropping calendar, crop varieties, agronomic practices, crop diversification and improved animal husbandry. Reducing environmental stress, ensuring self-sufficiency in staple crops (mainly rice) and other crop production practices, and enhancing economic viability of farm enterprises underpinned these adaptations. Off-farm and non-farm wage employment, temporary migration, self-employment and educating children, constituted core non-farm adaptation strategies.Emerging cropping systems like maize/cucumber and maize/stem amaranth/rice were economically more viable than the traditional rice/rice and rice/maize systems. Despite some uncertainties, farming was preferred to off-farm work, generating higher returns to labour for all cropping systems. Limited access to stress-tolerant varieties, extension services and affordable agricultural credit, combined with high production costs, variability in crop yields and output prices constituted man barriers to adaptation. Stronger agricultural research and support services, affordable credit, community-focussed farming education and training are critically important for effective adaptation to climate change.

No abstract