Islamic vs. Conventional Banking : Business Model, Efficiency and Stability

This paper discusses Islamic banking products and interprets them in the context of financial intermediation theory. Anecdotal evidence shows that many of the conventional products can be redrafted as Sharia-compliant products, so that the differen...

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Bibliographic Details
Main Authors:	Beck, Thorsten, Demirgüç-Kunt, Asli, Merrouche, Ouarda
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ACCOUNTING ADVERSE SELECTION AGENCY PROBLEMS AGENCY RELATIONSHIPS AMOUNT OF CAPITAL ASSET QUALITY ASSET RATIO ASSET RATIOS ASSETS RATIO ASSETS RATIOS BALANCE SHEET BALANCE SHEETS BANK ACTIVITIES BANK ACTIVITY BANK CREDIT BANK HOLDING BANK HOLDING COMPANY BANK INDONESIA BANK INSOLVENCY BANK REGULATION BANK RUNS BANKING FEE BANKING ASSETS BANKING ASSOCIATIONS BANKING MARKET BANKING SECTOR BANKING SECTOR ASSETS BANKING SYSTEM BANKING SYSTEMS BANKS BORROWER CAPITAL REGULATION CAPITALIZATION CASE OF DEFAULT CERTIFICATES OF DEPOSIT CHECKS COMPETITIVE MARKETS CONTAGION CONVENTIONAL BANK CONVENTIONAL BANKING CONVENTIONAL BANKS COST-EFFICIENCY COUNTRY COMPARISONS DEBT DEBT CONTRACT DEBT CONTRACTS DEGREE OF RISK DEMAND DEPOSITS DEPENDENT DEPOSIT DEPOSIT INSURANCE DEPOSITOR DEPOSITORS DEPOSITS DERIVATIVE DERIVATIVE PRODUCTS EARNING ASSETS EARNINGS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS ENTREPRENEUR ENTREPRENEURS EQUITY CAPITAL EQUITY PARTICIPATION FEE INCOME FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARY FINANCIAL INTERMEDIATION FINANCIAL INTERMEDIATION THEORY FINANCIAL MARKET FINANCIAL PRODUCTS FINANCIAL RISK FINANCIAL SERVICE FINANCIAL SERVICES FINANCIAL SHOCKS FINANCIAL STABILITY FINANCIAL STATEMENT FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCIAL SYSTEMS FINANCIAL TRANSACTIONS FIXED ASSET FIXED ASSETS FIXED RATE FOREIGN BANK FOREIGN BANKS FOREIGN OWNERSHIP GOVERNMENT INTERVENTIONS GOVERNMENT INVOLVEMENT GOVERNMENT OWNERSHIP GROSS REVENUES HOLDINGS HOST COUNTRY INCOME STATEMENT INCOME STATEMENTS INFORMATION ASYMMETRIES INSOLVENCY RISK INSOLVENT INSTRUMENT INTEREST PAYMENT INTEREST PAYMENTS INTEREST RATE INTEREST RATE PAYMENTS INTEREST RATE RISK INTERNATIONAL BANK INTERNATIONAL BANKS INVESTMENT BANK INVESTMENT DECISIONS INVESTMENT PURPOSES ISLAMIC BANK ISLAMIC BANKING ISLAMIC BANKS ISLAMIC FINANCE ISLAMIC MARKET ISLAMIC SCHOLARS LEGAL FRAMEWORK LEGAL SYSTEM LENDER LEVERAGE LIABILITY LIMITED LIABILITY LIQUID ASSETS LIQUIDITY LIQUIDITY CREATION LIQUIDITY RATIO LIQUIDITY RISK LOAN LOAN CONTRACTS LOAN LOSS LOAN LOSS PROVISIONS LOAN LOSSES LOAN-TO-DEPOSIT RATIO LONG-TERM LOANS MACROECONOMIC VARIABLES MARKET DISCIPLINE MARKET SHARE MARKET SHARES MARKET STRUCTURE MATURITY MATURITY MATCHING MATURITY MISMATCH MEASURES OF PROFITABILITY MERGERS MICROFINANCE MONETARY FUND MONEY LENDING MORAL HAZARD NET INTEREST MARGIN NON-PERFORMING LOANS NONPERFORMING LOANS NUMBER OF BANKS OPERATING COSTS OPERATING INCOME OPERATING LEASES OPERATIONAL RISK OPPORTUNITY COSTS OPTIMAL CONTRACTS OUTREACH OVERHEAD COST OVERHEAD COSTS OWNERSHIP STRUCTURE POLITICAL ECONOMY PRIVATE CREDIT PROBABILITY OF INSOLVENCY PROFIT MARGIN PROMISSORY NOTES PRUDENTIAL REGULATIONS PUBLIC POLICY REAL ESTATE RECOVERY PERIOD RESERVES RETURN RETURN ON ASSETS RETURN ON EQUITY RETURNS RIBA RISK MANAGEMENT RISK MANAGEMENT TOOL RISK SHARING RISK TAKING RISK-SHARING ARRANGEMENTS SAVINGS SAVINGS DEPOSITS SECURITIES STOCK MARKET STOCK RETURN STOCK RETURNS STOCKS SUBSIDIARIES SUPERVISORY AUTHORITIES SUPERVISORY FRAMEWORK SUPERVISORY POWER SUPERVISORY POWERS TRADING TRADITIONAL LOAN TRANSACTION TRANSACTION COSTS WHOLESALE FUNDING WITHDRAWAL
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101018092550 http://hdl.handle.net/10986/3929