Comparative Analysis of Risk Management in Conventional and Islamic Banks: The Case of Bosnia and Herzegovina

Kozarević, Emira; Nuhanovic, Senija; Nurikić, Mirnesa Baraković

doi:10.5539/ibr.v6n5p180

Cited by 7 publications

(6 citation statements)

References 5 publications

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“…Other comparative studies have found significant differences in risk levels and RMPs between CBs and IBs. For instance, Kozarević et al (2013) conduct a comparative study of RMPs between IBs and CBs in Bosnia and Herzegovina. They find that both types of bank are properly aware of what active RM is, but they lack sufficiently developed methods to manage their risks.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Risk and risk management practices

Elgharbawy

2020

JIABR

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Purpose This study aims to compare types and levels of risk and risk management practices (RMPs) including the recognition, identification, assessment, analysis, monitoring and control of risk in both Islamic and conventional banks. Design/methodology/approach A questionnaire survey was conducted among the Islamic and conventional banks in Qatar, together with an analysis of archival data extracted from the Thomson Reuters Eikon database for the period 2009-2018. Data were analysed using descriptive statistics, ANOVA and regression analysis. Findings Islamic banks encounter unique types and levels of risk that are not encountered by conventional banks. In Islamic banks, risks such as those of operation and Sharia non-compliance are perceived to be higher, while in conventional banks other risks such as those of credit and insolvency are higher; other risks, for example, liquidity risk, are faced by both. RMPs are determined by understanding risk and risk management, risk identification, risk monitoring and control and credit risk analysis, but not by risk assessment and analysis. However, the RMPs of the two types of bank are not significantly different, except in the analysis of credit risk. Research limitations/implications The study contributes to the debate in the literature by developing a better understanding of the dynamism of risk management in Qatari banks, which can be extended to similar contexts in the region. However, the relatively small sample size in only one country limits the possibility of generalizing the findings. The survey methodology is based on the perception of bankers rather than their actual actions and does not provide in-depth analysis for each type of risk, especially credit risk. However, using archival data, in addition to those from the survey, minimises the bias that would result from depending on one source of data. Practical implications The study provides valuable insights into the different types and levels of risk, as well as the RMPs in Islamic and conventional banks, which can help in guiding the future development and regulation of risk management in the banking sector of Qatar and its region. Originality/value The study helps to explain the mixed results of previous studies that compare types and levels of risk and RMPs in Islamic and conventional banks. Using different types of data and analysis, it provides evidence from one of the fastest growing economies in the world. It also addresses the concerns over RMPs in banks since the global financial crisis.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Risk and risk management practices

Elgharbawy

2020

JIABR

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“…yang menyebutkan adanya risiko kredit, risiko likuiditas, dan risiko operasional. Kozarevic, et. Al (Emira Kozarevic, :2013).…”

Section: Pendahuluanunclassified

“…(Emira Kozarevic :2013) Pendapat lain dari Karim (2008: 253) Likuiditas yang tersedia harus cukup, tidak boleh terlalu kecil sehingga mengganggu kebutuhan operasional sehari-hari, tetapi juga tidak boleh terlalu besar karena akan menurunkan efisiensi dan berdampak pada rendahnya tingkat profitabilitas.…”

Section: Risiko Pada Bank Syariahunclassified

Menelaah Elemen Etika Bisnis dalam Manajemen Resiko Bank Syariah

Kurnia

2020

iqtishaduna

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Abstrak Risiko merupakan suatu keadaan yang pasti terdapat dalam setiap aktivitas bisnis, termasuk bisnis bank. Manajemen risiko menjadi hal yang penting bagi bank karena terkait dengan penghimpunan dan penyaluran dana nasabah. Seperti halnya bank konvensional, bank syariah juga tidak lepas dari risiko. Namun, risiko yang dapat menimpa bank syariah bisa berbeda dikarenakan keunikan karakter bisnis bank syariah itu sendiri. Keunikan bank syariah tidak hanya terletak pada produk dan akad-akad pembiayannya, tetapi juga dari sisi kualitas sumber daya manusia (SDM) sebagai pengelola risiko. Ciri utama SDM bank syariah adalah performa akhlak yang berlandaskan etika dalam menjalankan bisnis. Oleh karena itu, studi ini bertujuan untuk mengidentifikasi risiko yang ada pada bank syariah, kemudian menemukan solusi berupa pengelolaan risiko pada bak syariah yang mengandung etika bisnis.

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“…In its business activities, the bank and its executives are constantly and inevitably facing an increasing number of risks, the most common of which are credit, liquidity, market and operational risks (Kozarević, et. al.…”

Section: Introductionmentioning

confidence: 99%

“…al. 2013;Jiang, 2018) which resulted in active risk management (Kozarević et al, 2013). The growing size of financial institutions dealing in money with respect to their size, organizational complexities, their new products along with advancement in technology and fierce competition within the market has increased the chance of occurrence of operational losses.…”

Section: Introductionmentioning

confidence: 99%

Securing Tomorrow: An Operational Risk Capital Cushion Perspective

Durraani¹

2021

PSSR

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This paper aims to conduct an in-depth analysis of commercial banks of Pakistan dealing operational risk, whose internal frameworks have been in place but in its early stages and lack consistency to provide the desired level of assurance to both management and regulators. Additionally, the paper is driven by the need of exploring and assessing the operational risk capital cushion in the light of Basel recommendations to pave way for further studies crucial for the survival of banks and that too in the context of a developing country which is rare in literature. Keeping in view of exploratory nature of the research, the strategy falling in the realm of qualitative research has used primary data from face to face interviews of risk managers analysed with the help of thematic analysis. The study finds a consistency considering the recommendations of Basel II of using only "basic indicator approach" for calculating operational risk cushion in Pakistan whereas Basel III recommendation of having a standardize approach to use across all banks is still a long road ahead while managers are unaware of the numbers their banks were keeping as a capital cushion which itself is a big risk.

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Comparative Analysis of Risk Management in Conventional and Islamic Banks: The Case of Bosnia and Herzegovina

Cited by 7 publications

References 5 publications

Risk and risk management practices

Risk and risk management practices

Menelaah Elemen Etika Bisnis dalam Manajemen Resiko Bank Syariah

Securing Tomorrow: An Operational Risk Capital Cushion Perspective

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