Capital adequacy norms for Islamic financial institutions
Author
Source
Issue
Vol. 5, Issue 1-2 (30 Apr. 1998), pp.37-55, 19 p.
Publisher
Islamic Development Bank (IDB) Islamic Research and Training Institute (IRTI)
Publication Date
1998-04-30
Country of Publication
Saudi Arabia
No. of Pages
19
Main Subjects
Economy and Commerce
Financial and Accounting Sciences
Religion
Islamic Studies
Topics
Abstract EN
This paper argues that a uniform application of the Basle capital adequacy norms to both conventional and Islamic financial institutions may be discriminatory and defeat the very purpose of the regulations, that of ensuring a “level playing field” for banks across the globe.
The business of Islamic banking is different.
The paper discusses some unique characteristics of assets and liabilities of Islamic banks.
The nature and magnitude of relevant risk factors for Islamic banks are observed to be quite different as compared to conventional riba-based banks.
Further, Islamic banks can “pass on” asset risk to investment account holders unlike their conventional counterparts.
Given the possibility of such risk absorption, the paper questions the relevance of the Basle norms in their present form and discusses certain modifications and alternative ways to compute capital adequacy measures for Islamic financial institutions
American Psychological Association (APA)
Ubayd Allah, Muhammad. 1998. Capital adequacy norms for Islamic financial institutions. Islamic Economic Studies،Vol. 5, no. 1-2, pp.37-55.
https://search.emarefa.net/detail/BIM-159660
Modern Language Association (MLA)
Ubayd Allah, Muhammad. Capital adequacy norms for Islamic financial institutions. Islamic Economic Studies Vol. 5, no. 1-2 (Apr. 1998), pp.37-55.
https://search.emarefa.net/detail/BIM-159660
American Medical Association (AMA)
Ubayd Allah, Muhammad. Capital adequacy norms for Islamic financial institutions. Islamic Economic Studies. 1998. Vol. 5, no. 1-2, pp.37-55.
https://search.emarefa.net/detail/BIM-159660
Data Type
Journal Articles
Language
English
Record ID
BIM-159660