The strategy of Islamic banks in hedging risks : the case of al Baraka Islamic bank of Algeria

Abstract EN

Islamic banking is not without risks that may arise from its activities or from the environment in which it operates, and risk management is considered as one of the most important topics in banking and financial management.

Therefore, this study aims to identify the role that risk management plays in Islamic banks in order to reduce the risks of financial crises that threaten Islamic banks.

Therefore, there is anurgent need to identify, measure, manage and control these risks.

The study found that Islamic banks face higher credit risks than their classical counterparts due to some of the imposed Sharia requirements that must be adhered to.

It has also been concluded that there is a necessity for an independent internal control system that works to provide information in coordination with the external auditor.

Such is the case with al Baraka Islamic Bank in Algeria that faces many risks and there is no immediate risk management strategy that is compatible with the provisions of Islamic Sharia law, and there is no special system to measure the risks management.

JEL classification: G32, G21