Ramifications of varying banking regulations on performance of Islamic Banks

Alam, N., Binti Zainuddin, S. S. and Rizvi, S. A. R. (2019) Ramifications of varying banking regulations on performance of Islamic Banks. Borsa Istanbul Review, 19 (1). pp. 49-64. ISSN 2214-8450 doi: 10.1016/j.bir.2018.05.005

Abstract/Summary

Recent financial crises have highlighted the importance of banking regulations to hedge against the high risk accredited to imbalances in banks' balance sheets. Nonetheless, banking regulations may have adverse effects. On the one hand, they serve as prudential measures that alleviate the effects of crises on the stability of the banking system while on the other hand; they may increase the cost of intermediation and reduce banks' profitability. Implementation of non-suitable regulations such as Islamic banks adopting conventional banks regulations could also impair banks' performance. This paper analyses the linkages between bank regulatory and supervisory structures associated with Basel III's pillars has any significant impact on Islamic banks' performance in Asia and Gulf Cooperation Council (GCC) using two-step Generalized Methods of Moments (GMM) technique. Findings suggest that regulatory variables are positively significant with Islamic banks' performance in Asian region but not in the GCC.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/81604
Identification Number/DOI	10.1016/j.bir.2018.05.005
Refereed	Yes
Divisions	University of Reading Malaysia
Publisher	Elsevier
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