Non-interest Banking in Practice

Mills, Paul S.; Presley, John R.

doi:10.1057/9780230288478_5

Cited by 3 publications

(2 citation statements)

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“…In addition, several conventional banks have Islamic windows, which offer Sharia'h- compliant products, over and above the conventional ones. Under this framework, the conventional ex ante interest rate is replaced by the ex-post PLS rate (Chong and Liu, 2009) in order to encourage these banks to invest in long-term projects (Mills and Presley, 1999) and promote social justice (Berg and Kim, 2014). Solarin et al .…”

Section: Literaturementioning

confidence: 99%

The behavior of Islamic and conventional banks around the pandemic: cross-country evidence

Ghosh

2023

IES

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PurposeUsing cross-country data on the 1,000 largest global banks for 2019, the paper aims to examine the response of bank risk and returns to the pandemic.Design/methodology/approachThe author employs weighted least squares (WLS) techniques for the purposes of analysis.FindingsThe findings suggest that banks with Islamic windows increased their riskiness in response to the pandemic, although there was not much impact on profitability. Additionally, the author categorizes banks based on certain major characteristics and find that these findings are manifest primarily for well-capitalized and less liquid banks.Originality/valueResearch as to the impact of the pandemic on banks' balance sheets has been an unaddressed area of research. By focusing on a large sample of banks across countries with both Islamic and conventional banking presence, the analysis sheds light on the balance sheet response of banks to the pandemic, an aspect that has not been addressed earlier.

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Section: Literaturementioning

confidence: 99%

The behavior of Islamic and conventional banks around the pandemic: cross-country evidence

Ghosh

2023

IES

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“…Islamic banking adoption has also been linked to economic growth, both in the short and in the long run (Farahani and Dastan, 2013; El-Galfy and Khiyar, 2012), with the relationship often being bi-directional (Elfeituri and Alotaibi, 2021; Ibrahim and Shirazi, 2020; Imam and Kpodar, 2016; Abduh and Omar, 2012). The risk-sharing feature of the PLS paradigm should allow Islamic banks to lend on a longer-term basis to projects with higher risk-return profiles and, thus, to promote economic activity (Furqani and Mulyany, 2009; Mills and Presley, 1999; Chapra, 1992).…”

Section: Literature Reviewmentioning

confidence: 99%

Islamic banking, efficiency and societal welfare: a machine-learning, agent-based study

Polyzos

Samitas

Syriopoulos

2022

IMEFM

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Purpose This paper models the benefits of Islamic banking on the efficiency of the banking sector and on societal happiness. This paper aims to examine how the adoption of Islamic banking to various degrees affects economics outcomes. Design/methodology/approach This study uses machine-learning tools to build a happiness function and integrate it in an agent-based model to test for the direct and indirect welfare effects of implementing Islamic banking principles. Findings This study shows that even though Islamic banking systems tend to reduce economic activity, financial stability and societal happiness is improved. Additionally, a banking sector using Islamic principles across all its members is better equipped to handle banking crises because contagion to both economic activity and societal welfare is greatly reduced. At the same time, adoption of the profit-and-loss sharing (PLS) paradigm by banks may also slow down economic growth. Research limitations/implications The findings extend existing literature on the advantages of Islamic banking, by quantifying the welfare benefits of the PLS paradigm on happiness and financial stability. Originality/value To the best of the authors’ knowledge, this paper is the first to combine agent-based modelling with machine learning tools to examine the benefits of the Islamic banking model on financial stability, social welfare and unemployment.

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Islamic Mutual Funds as Faith-Based Funds in a Socially Responsible Context

Forte

Miglietta

2007

SSRN Journal

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Defining social investing and its boundaries is a challenging task. Since the religious beginning of ethical investments, many overlapping investment styles have been grouped into the bucket of socially responsible investments, or SRI. This includes, for instance, faith-based investments. In this paper we study the underlying principles of SRI and Islamic funds as investment classes, and try to determine whether Islamic mutual funds, as faith-based investments, can be included into the category of socially responsible mutual funds, or if they exhibit distinguishing characteristics that indicate that they would be more fittingly grouped in a separate investment family. We address the question from both a qualitative and quantitative point of view. Comparing ideas, ratios and investment styles underlying SRI and comparing them to Islamic portfolios, we identify the potential inconsistencies related to some of the investment decisions. Together with a qualitative assessment of the differences and similarities, we discuss, in the quantitative section of our study, the different sector and country composition of two generic portfolios, SRI and Islamic (proxied by relevant European indices), derived from the application of the investment screens. In addition, through a cointegration analysis on FTSE indices, we show that FTSE Islamic, exhibits peculiar and interesting portfolios' differences in terms of econometric profile, compared to conventional and SRI indices. This paper attempts to unify the studies regarding SRI, with the available studies on Islamic investments. To the best of authors' knowledge, this is the first time that SRI and Islamic indices are analysed and compared. JEL Classification : G12, G14

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Non-interest Banking in Practice

Cited by 3 publications

References 0 publications

The behavior of Islamic and conventional banks around the pandemic: cross-country evidence

The behavior of Islamic and conventional banks around the pandemic: cross-country evidence

Islamic banking, efficiency and societal welfare: a machine-learning, agent-based study

Islamic Mutual Funds as Faith-Based Funds in a Socially Responsible Context

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