- Page reference followed by f indicate an illustrated figure; and page reference followed by t indicate a table
-
- AAOIFI see Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI)
- Abu Dhabi Investment Authority 171
- Abu Dhabi Islamic Bank 81
- accountability for risk 364
- Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) 25, 34–6, 35t, 57, 152, 179, 313, 386
- standards 36, 99–100, 103, 141, 143, 180, 217, 229, 271, 289, 360, 363, 376
- on sukuk 176–7
- accounting standards 217f, 362
- AAOIFI 36, 99–100, 103, 141, 143, 180, 217, 229, 271, 289, 360, 363, 376
- IAS 360
- IFSB 37, 38t, 99–100, 124, 128, 151, 152, 180, 229, 271, 360
- IFRS 104, 360
- IIFM 124
- IILM 124
- LMC 124
- Advanced Measurement Approach (AMA) 135, 140
- aggregate index 45
- Agricultural Bank of Iran 177, 348
- Ahmad Hamad Algosaibi & Brothers 103, 106, 342
- AIG 159
- Al Baraka Banking Group 60, 81, 98, 103
- Al Gosaibi Group 327
- Al Mahmood, Dr Abdul Latif 174
- Al Rajhi Bank 64, 68, 77, 171
- Al Sanea, Maan 103, 104
- Algosaibi Groups 104
- ALM see Asset Liability Management (ALM)
- AMA see Advanced Measurement Approach (AMA)
- Amlak 168, 338
- analysis of variance (ANOVA) 209
- anti-money laundering (AML) systems 98
- Arab Bank 104
- Arbitrage Pricing Theory (Ross) 46
- Arbitration and Reconciliation Centre for Islamic Financial Institutions (ARCIFI) 35t
- arbun 65, 113, 115–16, 369
- Arcapita Bank 66, 168, 329, 375
- ARCIFI see Arbitration and Reconciliation Centre for Islamic Financial Institutions
- Asian Development Bank 36
- Asian financial crisis (1997–1998) 329
- asset composition of Islamic banks 175, 175t
- asset-backing obligation 20
- asset–liability management (ALM) 53, 60, 80–92
- displaced commercial risk 86–9
- funding sources for IFIs 80–3, 82t
- in Islamic banking 84–6
- operational risk 89–92
- asset–liability management risk , 313, 338, 344
- Awal Bank 103–4
- Awan, Dr Mohammed Mahmoud 371
-
- back-testing 61
- Badawi, Prime Minister Abdullah 173, 361
- Bahrain Central Bank 147
- Bahrain Islamic Bank 37
- bai' salam 24, 114–15, 116
- bai'al-arbun 113
- balance sheet netting 110
- Bank for International Settlements (BIS) 36, 130
- Bank Islam 150, 329
- Bank Islam Malaysia Berhad 150
- Bank Muamalat Malaysia Berhad 150
- Bank Negara Malaysia 77
- Bank of Credit and Commerce International (BCCI) 98
- Barclays 171
- Bartlett's test of Sphericity 209, 271–2, 272t, 289–90, 290t
- Basel Accord
- Basel I Accord (1988) 128, 130–1, 325
- Basel II Accord , , 92, 128, 132, 354–5, 384, 387
- vs 1988 Basel Capital Accord 132
- adherence to 229
- credit risk capital charge 134–5
- criticism of, and amendments to 136–8
- determination of risk weights 140
- Islamic banks and 138–42
- market risk capital charge 135
- operational risk capital charge 135
- opinions on
- structure 133f
- Three Pillars of 132–6, 152
- Pillar 134, 135, 138–40, 355
- Pillar 134, 137, 141, 355, 359
- Pillar 135, 136, 137, 141–2
- Basel III Accord , 142–3, 143f, 354–5, 387
- Basel Committee on Banking Supervision (BCBS) 70, 89, 128, 129, 130, 152
- on capital charges 135
- ‘International Framework for Liquidity Risk Measurement, Standards and Monitoring’ 137
- on liquidity 141
- standards 43, 152, 387
- ‘Strengthening the Resilience of the Banking Sector’ 137
- see also Basel Accord
- Basic Indicator Approach 135, 139, 145
- bay' al-dayn (sale of debt) 77
- bay' al-salam contracts 58, 68
- BCBS see Basel Committee on Banking Supervision (BCBS)
- benchmark risk 63, 66–7, 219
- beta of an asset 45
- BIS see Bank for International Settlements (BIS)
- Black's zero-beta model 124
- Black-Scholes-Merton option pricing 46
- Blom Development Bank of Lebanon 94
- BNP-Paribas 15, 103
- Bonferroni adjustment 278
- Box's Test of Equality of Covariance Matrices 274, 276, 277t, 279, 279t, 293t
- Buffett, Warren 96, 159
- business risk 51, 52, 53
-
- capital
- classification of 129–30, 130t
- significance in banking 128–9
- capital adequacy for Islamic banks 127–51, 281–3, 353–6
- Capital Adequacy Ratio (CAR)
- Capital Asset Pricing Model (CAPM) 124
- Capital Requirement Report 296t
- capital-to-liabilities ratio 129
- car finance 15
- CAR see Capital Adequacy Ratio (CAR)
- cash management 53
- CDOs see Collateralised Debt Obligations (CDOs)
- CDS see Credit Default Swaps (CDS)
- Central Bank of Bahrain (CBB) 72, 77
- Central Bank of Kuwait 147
- Central Bank of Sudan 77
- Chi-Square test 208, 218, 224, 225, 253, 346
- CIBAFI see (General) Council for Islamic Banks and Financial Institutions (CIBAFI)
- Citibank 15, 171
- Classified Accounts Report 296t, 300t
- closed questions 196–7
- Cohen's 279, 280, 293
- Collateralised Debt Obligations (CDOs) 164
- Committee of European Banking Supervisors 70
- commodity risk 52, 68, 219
- Commodity Risk Report 295, 296t
- concentration risk , 52, 59–60, 338, 339, 341, 344
- conglomeration of risks 107
- corporate governance frameworks 341–2, 343
- corporate governance risk 46, 102–4, 341, 343
- Council for Islamic Banks and Financial Institutions (CIBAFI) 34, 35t, 37
- Country Report 296t, 299t
- country risk 52, 222
- credit cards 15
- credit crisis 51, 156–62, 356–63
- (2008/09) 94
- causes of 160–2
- crisis, need for alternative system 163
- debt bubble 156–9
- derivatives and 159–60
- Islamic finance and banking and 163–73, 165t, 283–95
- factor analysis for 289–92
- failures in Islamic finance 169–70
- impact on Islamic banking 165–8
- Islamic banking strength after crisis 170–3
- K-W test
- accounting standards 287t
- nature of activities 287t
- nature of FI 286, 286t
- results by region 283–6, 286t
- results by respondent's position 288t
- MANOVA test 292–5, 293t
- risk perception 234–9, 235f, 236t–8t
- total variance 290t
- perceptions of, by questionnaire 234–9, 235f, 236t–8t
- credit crunch see credit crisis
- credit default swaps (CDS) 113
- credit derivatives 112
- Credit Exposure Report 295, 296t
- credit ratings 110
- credit risk (default risk) 46, 52, 54, 339, 341
- in Islamic banks 55–9
- management 339
- risk perception
- credit VaR 59
- CreditEdge 59
- Cronbach's alpha test 206–7
- cross-currency rate swaps 369
- currency forwards 369
- currency risk 52, 67–8, 219
-
- data analysis 207–10
- data collection 195–207
- Dawnay Day, Richmond, Aston commodities 68
- DB see Deutsche Bank (DB)
- DCR see Displaced Commercial Risk (DCR)
- deductive theory 193–4
- depth interviews 202
- descriptive analysis method 207–8
- descriptive research 192
- Deutsche Bank AG (DB) 64
- DIB see Dubai Islamic Bank (DIB)
- Direct Oblimin 273
- discretionary portfolios 15
- displaced commercial risk (DCR) 86–7, 93, 123, 344
- management of 87–9, 87f
- risk perception
- documentation risk 92
- Doha Bank 99
- dual murabahah 64, 65, 116–17, 118f
- Dubai Islamic Bank (DIB) 37, 64, 88, 91
- Dubai World 169
-
- EAD see Exposure at Default (EAD)
- East Cameron Gas Company 169, 327
- East Cameron Partners (ECP) 29
- efficient market hypothesis 46
- Eglinton, Ken 361
- Equamax 273
- equity and commodity prices (price risk) 61
- equity investment risk 65–6
- equity management 53
- Equity Mark-To-Market Report 296t, 300t
- Estimates of Worst Case 365
- European Islamic Investment Bank Plc (EIIB) 73, 201
- European Union
- Capital Adequacy Directive 132
- expected losses (EL) 59
- expected shortfall 62
- explanatory research 193
- explorative approach 194
- exploratory interviews 202
- exploratory research 192
- exposure at default (EAD) 59, 140
- external fraud 89
-
- factor analysis 209, 253, 271–81, 351, 357
- factor rotation 273
- factor sensitivities 61
- family ownership/majority ownership 342–3
- fiduciary risk 100–2
- financial crisis see credit crisis
- financial risk 51, 52, 53
- Financial Services Authority (FSA) 105
- fiqh 57, 93, 112, 113, 115, 116, 368, 385
- fiqh al-muaamalat 93
- First Energy Bank 374
- Fisher, Irving 45
- foreign exchange rates (FX risk) 61
- Foreign Exchange (FX) Risk Report 295, 296t, 298t
- forward rate swaps 369
- free-style interviews 202
- frequency distribution 207–8, 220, 250, 340
- of capital adequacy standards 230f
- of current practices in Islamic banking 248f
- of risk perceptions 222, 223t
- Friedman test 209, 253, 264, 265
- FSA see Financial Services Authority (FSA)
- future of Islamic banking 372–8
- future research 390–1
-
- gap analysis 61, 110, 365
- GCC see Gulf Co-operation Council (GCC)
- (General) Council for Islamic Banks and Financial Institutions (CIBAFI) 34, 35t, 37
- German State of Saxony Anhalt sukuk 28
- gharar 20, 62, 112, 114, 115
- global credit crisis 325–30
- Global Investment House 167, 168, 327
- governance risks 53
- Gulf Co-operation Council (GCC) 18
- Board Directors Institute 343
- Gulf Finance House in Bahrain 66
- Gulf International Bank 104
-
- IAH see Investment Account Holder (IAH)
- IAS accounting standards 360
- IBB see Islamic Bank of Britain Plc (IBB)
- IBF see Islamic Banking and Finance (IBF)
- ICD see Islamic Corporation for the Development of the Private Sector 35t, 36–7
- ICIEC see Islamic Corporation for the Insurance of Investment and Export Credit 35t
- ICMA see International Capital Market Association (ICMA)
- IDB see Islamic Development Bank (IDB)
- idiosyncratic risk 45
- IFI balance sheet 81t
- IFRS see International Financial Reporting Standards (IFRS)
- IFSB see Islamic Financial Services Board (IFSB)
- Ihlas Finans of Turkey 74, 99
- IIFM see International Islamic Financial Markets (IIFM)
- IILM see International Islamic Liquidity Management Corporation (IILM)
- IIMM see Islamic Interbank Money Market (IIMM)
- IINCEIF see International Centre for Education in Islamic Finance (IINCEIF)
- IIRA see Islamic International Rating Agency (IIRA)
- ijara (ijarah) 22–3, 30, 56, 60, 68, 81, 91, 107, 121, 140, 145, 170, 174, 250, 264, 345, 346, 348
- ijarah sukuk 25–6, 78
- ijarah wa-Iqtinah 22–3
- IMA see Internal Model Approach (IMA)
- IMF see International Monetary Fund (IMF)
- inductive reasoning 193, 194
- Industry Concentration Risk Report 295, 296t
- infrastructure and information systems 51
- initial public offerings 15
- interest rate risk 63, 135
- interest-rate cycle 63
- Internal-Based Rating System 365
- internal fraud 89
- internal model approach (IMA) 135, 140
- internal rate of return (IRR) 178
- internal rating based approach (IRB) 134, 140
- International Capital Market Association (ICMA) 77
- International Centre for Education in Islamic Finance (IINCEIF)
- International Financial Reporting Standards (IFRS) 100, 103, 104
- accounting standards 37, 38t, 99–100, 104, 124, 128, 151, 152, 180, 229, 271, 360
- International Islamic Bank for Investment and Development in Egypt, 89
- International Islamic Centre for Reconciliation and Commercial Arbitration (IICRA) 34
- International Islamic Financial Markets (IIFM) 34, 35t, 37–9, 77
- accounting standards 124
- Memorandum of Understanding with the International Capital Market Association (ICMA) 37–8
- Memorandum of Understanding with the International Swaps and Derivatives Association (ISDA), 111
- ‘tahawwut’ (Hedging) Master Agreement 111
- International Islamic Liquidity Management Corporation (IILM) 39, 79
- International Islamic Trade Finance Corporation (ITFC) 35t
- International Monetary Fund (IMF) 34, 36
- International Swaps and Derivatives Association (ISDA) 39
- interpretative analysis 210
- interview data analysis 309–36
- interview questions 310–11
- interview themes 310
- results and data analysis 311–35
- capital adequacy for Islamic banks 311, 319–25
- future of Islamic banking 311, 333–5
- global credit crisis 311, 325–30
- risk mitigation 311, 330–2
- risk perception in Islamic banking 310–11, 311–19
- theory vs practice in Islamic banking 311, 332–3
- interviews 202–5, 205t
- administration of interview and sampling 204–5
- advantages of 203
- depth 202
- disadvantages 203
- exploratory 202
- free-style 202
- interview structure 204
- operationalising 203–5
- sample size 205
- standardised 202
- inventory management 107
- Investment Account Holder (IAH) 138, 139
- Investment Dar Company (‘TID’) v. Blom Development Bank 94
- Investment Dar, The see The Investment Dar (TID)
- investment risk reserves (IRRs) 86, 87, 200
- IRB see Internal Rating Based Approach (IRB)
- IRR see Internal Rate of Return (IRR)
- IRTI see Islamic Research and Training Institute (IRTI)
- ISDA see International Swaps and Derivatives Association (ISDA)
- Ishaq, Sheikh Esam M. 171
- Islamic Bank of Britain Plc (IBB) 98
- Islamic Bank of South Africa 99
- Islamic banking
- future of 372–8
- practical issues 304–6, 370–2
- theory vs practice in 332–3
- Islamic Banking Act (1983) 150
- Islamic Banking and Finance (IBF)
- development stages 33f
- global assets 18, 19f
- historical background of 14–17, 16t
- institutional developments 33–9, 35t, 36f
- principles of 20
- size of industry 17–19, 19t
- vs conventional banking 31–3, 31f, 32t
- Islamic Corporation for the Development of the Private Sector (ICD) 35t, 36–7
- Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) 35t
- Islamic Development Bank (IDB) 34, 35t, 36, 37, 78
- Islamic finance contracts
- correlation between conventional and Islamic banks and risk perception 225, 226t
- intensity of use of 222–4, 224t, 226f
- perceived risk levels of 222–6
- risk perception in Islamic finance contracts 225, 225t
- see also individual instruments
- Islamic financial contracts 20–4, 21f, 345–50
- Islamic Financial Services Board (IFSB) 34, 35t, 36–7, 79, 128, 152, 354
- Exposure Draft on Risk Management 101–2
- GN-1: Guidance Note in Connection with the Capital Adequacy Standard: Recognition of Ratings by ECAIs on Shari'ah-Compliant Financial Institutions 144
- principles of credit risk management 55t–6t
- principles of market risk management 62t
- principles of rate of equity investment risk management 65t
- principles on capital adequacy , 143–50
- standards –6, 38t–9t, 99–100
- IFSB-1: Guiding Principles of Risk Management for Institutions 38t, 42–3, 143
- IFSB-2: Capital Adequacy Standards for Institutions 38t, 143–4, 150
- IFSB-3: Guiding Principles on Corporate Governance for Institutions Offering Only Islamic Financial Services 38t
- IFSB-4: Disclosures to Promote Transparency and Market Discipline for Institutions offering Islamic Financial Services 38t
- IFSB-5: Guidance on Key Elements in the Supervisory Review Process of Institutions offering Islamic Financial Services 38t
- IFSB-6: Guiding Principles on Governance for Islamic Collective Investment Schemes 38t
- IFSB-7: Capital Adequacy Requirements for Sukuk Securitisations and Real Estate Investment 38t, 144
- IFSB-8: Guiding Principles on Governance for Takaful (Islamic Insurance) Undertakings 38t
- IFSB-9: Guiding Principles on Conduct of Business 38t
- IFSB-10: Guiding Principles on Shari'ah Governance Systems for Institutions Offering Islamic Financial Services 38t
- IFSB-11: Standard on Solvency Requirements for Takaful (Islamic Insurance) Undertakings 38t
- supervisory discretion formula for calculating CAR 146, 146f, 147f
- Islamic hedging tools 114–17
- Islamic insurance see Takaful
- Islamic Interbank Money Market (IIMM) 77
- Islamic International Rating Agency (IIRA) 34, 35t, 39
- Islamic mortgages 15, 60, 77, 98, 168
- Islamic products distribution 174f
- Islamic Profit Rate Swap (IPRS) 69
- Islamic Research and Training Institute (IRTI) 34–5
- istisna'a contracts 23, 58, 68, 91, 93, 107, 121, 139, 140, 145, 186, 245, 345, 348
- istithmar 30
- ITFC see International Islamic Trade Finance Corporation (ITFC)
-
- Kaiser-Meyer-Olkin (KMO) test 209, 271–2, 272t, 289–90, 290t
- Kaiser's criterion 273
- Keynes, John Maynard 45, 163
- KFH 171
- Khaleeji Commercial Bank 374
- khiar 369
- khiyar al-shart option 116
- know-your-customers (KYC) system 98
- Kondratief cycles' 156
- Kruskal-Wallis (K-W) test 208, 222, 253, 340
- on capital adequacy 282, 282t
- credit crisis and Islamic banking
- accounting standards 287t
- nature of activities 287t
- nature of FI 286, 286t
- results by region 283–6, 286t
- results by respondent's position 288t
- on risk measurement 301t
- on risk mitigation 303–4, 303t, 367–70
- on risk perception
- concentration risk 258, 259t
- corporate governance risk 254, 259t
- credit risk 260, 260t
- entire research sample 254, 254t–6t
- liquidity risk 260–1, 261t
- nature of FI 269–71, 270t, 272t
- perceived risk seriousness 269, 270t
- respondent's position and accounting standards 261, 262t
- results by nature of FI 261, 262t
- risk categories in relation to nature of FI 261–3, 263t
- selected sample data 254, 258t
- on risk reporting 295, 296t
- Kuala Lumpur Interbank Offered Rate (KLibor) 66
- Kuwait Finance House 37, 68, 85, 88, 329
- Kuwait Souq al-Manakh crisis (1982) 329
-
- lack of standardisation risk 93–4
- Large Exposure Report 295, 296t
- lease finance 15
- leasing and real estate projects 15
- legal risk 52, 53, 105–7, 312–13
- Lehman Brothers , 159
- Levene's Test of Equality of Error Variances 276, 277t, 279, 280t, 293, 293t
- LGD see Loss Given Default (LGD)
- LIBOR, national variant of 66
- Likert scale 207, 218
- limitations of study 389–90
- liquidity management 53
- Liquidity Management Centre (LMC) 34, 35t, 37, 77, 79
- Liquidity Management House (LMH) 329
- liquidity risk , 46, 52, 69–80, 123, 313, 338, 340, 341, 344
- in Islamic banks 70–4, 71t, 72f, 74
- reduction in Islamic banks 74–80
- risk perception
- Liquidity Risk Report 296t, 299t
- literature review , 43, 124, 182, 195, 199, 210, 220, 226, 337, 338, 353, 354, 378, 389
- LMC see Liquidity Management Centre (LMC)
- LME see London Metal Exchange (LME)
- London Metal Exchange (LME) (Over The Counter (OTC) Contracts) 21
- loss given default (LGD) 59, 140
-
- Malayan Banking Berhad 82
- Malaysia
- Banking Act 1983 150
- during 1997 currency crisis 154
- IFSB Act 2002 37
- market share 18
- Malaysian Financial Market Association 369
- Malaysian ringgit (MYR) 29
- Maliki school 93–4, 15
- Mann-Whitney U test 208
- MANOVA test 253, 274, 279, 281, 352, 362
- mark-up based contracts 347–9
- mark-up risk 66, 219
- marked-to-market trading 61–2
- market risk 46, 52, 54, 61–9
- charges 140
- in Islamic banks 62–3, 62t
- management 61
- managing for IFIs 68–9
- risk perception
- Market Risk Amendment (1996) 144
- maslahah 113
- Master Agreement for Treasury Placement (MATP) 39
- maturity matching analysis 365
- maysir 112, 115
- Merrill Lynch 46
- Mit Ghamr bank, Egypt 14
- mixed method-based research 195
- Modigliani and Miller Theorem 46
- money laundering 46
- Monte Carlo approach 61
- Moody's 59
- mortgages 64
- mudarabah (profit-sharing agreement) 22, 30, 65, 345
- mudarib 57–8, 65–6
- ‘mudarib fee’ 22
- multiple factor model 46
- multivariate analysis of variance (MANOVA) 209, 253, 274, 279, 281, 292, 295, 352, 361, 362, 382
- multivariate tests 276–8, 277t, 280t, 284t
- murabahah (‘cost-plus financing’ or ‘mark-up’) 21–2, 23, 57–8, 68, 72–3, 121, 219, 345
- dual 64, 65, 116–17, 118
- fixed income 175
- intensity of use of 222, 224t
- reverse 319
- risk perception 225, 225t, 266–9, 266t, 267t, 268t, 269t
- ‘murabahah syndrome’ 174, 222, 346
- musawama 24
- musharakah (equity participation) 22, 30, 65–6, 121, 219, 222, 345, 346, 349
- mutajara 77
-
- Obama, Barack 153
- OIC see Organisation of Islamic Cooperation (OIC)
- oil prices (1973) 14
- open-ended questions 196–7, 199–200, 210
- operational risk 52, 54, 89–90
- IFSB principles of 90t
- in Islamic banks 90–2
- risk perception
- Operational Risk Report 296t, 297t
- Organisation of Islamic Cooperation (OIC)
- Fiqh Academy Resolution 57
- originate-and-distribute business approach 29
- originate-and-hold business model 29
- originate-to-distribute model 157
-
- parallel bay' al-salam contract 68
- parallel salam 24
- parametric tests 61, 208
- Partial Eta Squared 279, 280
- for ‘resilience of IFIs’ 293
- PCA see principal component analysis (PCA)
- PD see Probability of Default (PD)
- Pecking Order Theory 46
- people risk 91–2, 219
- PER see Profit Equalisation Reserve (PER)
- personal loans 15
- petrodollars 14
- Pillai's Trace 276
- PLS see Profit and Loss Sharing (PLS)
- political risk 52, 222, 339–40, 384
- portfolio theory 45
- PPFs see Principal Protected Funds (PPFs)
- price risks 68
- Prince Waleed's Kingdom Holdings 171
- principal component analysis (PCA) 273, 290
- Rotated Component Matrix 291, 292t
- total variance 290t
- Varimax rotation 290
- Principal Protected Funds (PPFs) 116
- principal-agent problem 57–8
- private equity 15
- probability of default (PD) 59, 140
- profit-and-loss sharing (PLS) 20, 33, 117–18, 219
- contracts 141
- modes 54
- principle 40
- profit equalisation reserve (PER) 86, 87, 88, 139, 144, 178, 220
- profit-rate cycle 63
- Profit Rate Risk Report 296t, 298t
- profit rate swaps 64, 69, 111, 368, 369
- profit-sharing contracts , 347–9
- profit-sharing investment accounts (PSIAs) 63–4, 80–1, 128, 178–9, 180
- restricted 80
- unrestricted 80
- prohibition of interest see riba
- prohibition of uncertainty see gharar
- prohibition of unlawful assets see haram
- Promax 273
- PSIA see profit-sharing investment accounts (PSIA)
-
- qard al-hasan 65
- qard hassan 24–5, 359
- Qatar Investment Authority 171
- Qatar Islamic Bank 68
- qualitative data analysis 210
- qualitative method 191, 194, 195
- quantitative data analysis 207–10
- quantitative research method 191, 194, 195
- Quartimax 273
- Quartimin 273
- questionnaire, descriptive: data analysis and results 213–51
- characteristics of respondents 213–17
- accounting standards used by financial institution 217, 217f
- activities of financial institution 215–17, 216t
- geographic distribution of study sample 214, 214t
- nature of financial institution 215, 216t
- positions of participants 214–15, 215t
- evaluating the practice of Islamic banking 246, 247t, 248
- future of Islamic banking 248–50
- growth strategies for IFIs 248, 249t, 250t
- risk perception 217–50
- additional risk issues facing IFIs 226–9, 227f, 228
- among different groups 220, 221t
- capital adequacy for Islamic banks 229–34
- credit crisis and Islamic banks 234–9
- Intensity of use of different Islamic financial contracts 222–4, 224t, 226
- overall risks faced by Islamic banks 217–22, 218t
- risk issues in Islamic banks 217–39
- risk levels of Islamic finance contracts 222–9, 223t
- risk management and mitigation 239–46
- risk management and reporting 239–42, 240t, 241t
- risk measurement 242, 243
- risk mitigation 244–6, 244f, 245, 246
- risks attached to Islamic finance contracts 225, 226
- questionnaire, study 393–400
- questionnaires, survey 195–202
- advantages of 196
- disadvantages of 196
- level and characteristics of measurements 197–8
- interval/ratio scale 197
- nominal scale 197
- ordinal scale 197
- open-ended v closed questions 196–7
- response rate 201t
- sampling 198–202
- administration and 201–2
- design and structure 199–200
-
- rab al-mal (principal) 57, 65
- RAROC see Risk-adjusted Return on Capital (RAROC)
- rate-of-return risk (profit rate risk) 61, 62–5, 63t, 123, 219
- real estate sector 15, 18, 56, 59–60, 73, 83, 98, 164, 165, 167, 168, 181, 225, 312, 339
- regulatory and tax issues 104–5
- regulatory risk 52, 140, 222
- reliability of data 205–7
- re-pricing risk 52
- reputational risk , 52, 96–9, 312, 315, 338, 339, 344
- research, future 390–1
- research design 191–3
- research difficulties and limitations 210–11
- research hypotheses 185–91
- research implications and recommendations 386–9
- consolidation 387
- diversification 387–8
- innovation 388
- liquidity enhancement 388
- risk management infrastructure, investment in 388
- Shari'ah-based approach versus Shari'ah compliance 388–9
- research methodology 191
- research on risk management in Islamic banks 120–3
- research questions and objectives 183–5
- research strategy 193–4
- deductive theory 193–4
- explorative approach 194
- inductive approach 194
- responsibility for risk 364
- return on equity (ROE) 122–3
- riba 20, 59
- risk
- classification of 51–4
- common to both Islamic and conventional banks 54–9
- definition 44
- interaction and mutation of 54
- risk-adjusted return on capital (RAROC) 117
- risk avoidance techniques 52
- RiskCalc 59
- risk culture and governance 48–9
- risk diversification 110
- risk exposures 53t
- risk management
- conducting 49–50, 50f
- definition 44–5
- framework 48–51, 49f
- history of 45–6
- systemic importance of 47–8
- vs risk measurement 48
- risk management and reporting 239–42, 240t, 241t–2t, 295–300, 363–5
- frequency of producing capital requirement report 297t
- frequency of producing classified accounts report 300t
- frequency of producing country report 299t
- frequency of producing equity mark-to-market report 300t
- frequency of producing FX risk report 298t
- frequency of producing liquidity risk report 299t
- frequency of producing operational risk report 297t
- frequency of producing profit rate risk report 298t
- risk measurement 242, 243t, 50, 301–2, 365–7
- risk mitigation 244–6, 244f, 245t, 246t, 303–4, 367–70
- by interview 330–2
- in Islamic banking 110–12
- K-W test results for 303t
- risk obligation 20
- risk perception 217–50, 254–81
- in Islamic banking 311–19
- overall risks 254–63
- Islamic finance contracts 264–9
- K-W test results
- concentration risk 258, 259t
- corporate governance risk 254, 259t
- credit risk 260, 260t
- entire research sample 254, 254t–6t
- liquidity risk 260–1, 261t
- nature of FI 269–71, 270t, 272t
- perceived risk seriousness 269, 270t
- respondent's position and accounting standards 261, 262t
- results by nature of FI 261, 262t
- risk categories in relation to nature of FI 261–3, 263t
- selected sample data 254, 258t
- risk management and reporting 295–300, 363–5
- risk-return trade-off 45, 47
- risk-sharing assets 175–6
- Risk Tracker 59
- risk-transferring techniques 52
- risk weighted assets (RWAs) 145, 146
- risk-weighted capital ratio 150
- risk weightings 117
- ROE see return on equity (ROE)
- Rotated Component Matrix 273, 275
- Royal Bank of Scotland 157
- Roy's Largest Root 276
- RWAs see risk weighted assets (RWAs)
-
- Saad Group , 29, 103, 104, 106, 169, 327, 342
- salam (salaam) (forward sale) 24, 30, 58, 121, 345
- Saudi Arabian Monetary Agency (SAMA) 77
- securitisation 369
- securitised debt-based assets 164
- self-administered questionnaire 195
- semi-structured interviews 195
- Shafii school 93–4, 115
- Shamil Bank of Bahrain 85
- Shamil Bank of Bahrain v. Beximco Pharmaceuticals Ltd in 2004 106
- Shari'ah and Islamic derivatives 112–14
- Shari'ah arbitrage risk 95
- Shari'ah-compliant engineering 317, 369
- Shari'ah-non-compliance risk , 93–6, 218, 219, 229, 312, 338, 340, 344
- Shari'ah scholars, shortfall of 95–6, 97f
- Sharjah Islamic Bank 81
- Sharpe's Capital Asset Pricing Model (CAPM) 45–6
- significance testing 208
- single-factor models of risk 45
- SIVs see Special Investment Vehicles (SIVs)
- snowball sampling method 198–9, 204
- Solidarity Fund 35t
- Sorouh PJSC 108
- Spearman's Rank Correlation Coefficient 208, 224, 225
- special investment vehicles (SIVs) 164
- stamp duty 105
- Standard & Poor's 59
- Standard Chartered Bank 15
- standardised approach (SA) 135, 139
- standardised interviews 202
- Stiglitz, Joseph 159
- stop-loss provisions 61
- stress-testing analysis 50, 61, 110
- structured products, mutual funds, 15
- subprime assets 164
- subprime mortgage 154, 156–7, 359
- sukuk (sak) 25–30, 176–7, 369, 383
- asset-backed 81
- defaults 169–70
- definition 25
- East Cameron asset-backed 108, 109t
- Golden Belt 106
- ijara sukuk 25–6
- issuance 2008–2009 164
- issuance by country 29, 30f
- lack of liquidity 78–9
- market developments 26–30, 27f
- risk management issues in 107–9
- transparency 109
- types of 25–6
- systematic risk 52, 157, 170, 179, 180, 322, 355
-
- Tabung Haji in Malaysia 14
- Tadawul (Saudi stock exchange) 78–9
- Tahawwut (Hedging) Master Agreement 39
- takaful 15, 17, 98, 391
- Tamweel 108, 168, 338
- tangibles 21, 56, 140, 144, 177, 314, 319, 339
- tawarruq 21, 22, 68, 173–5
- technology risk 92
- teleconference interviews 204
- Tests of Between-Subjects Effects 278–9, 278t, 280, 281t, 293, 294t
- The International Banking Corporation (TIBC) 103
- The Investment Dar (TID) , 29, 167, 169, 313, 327, 375
- tolerance level 61
- total return swaps 369
- treasury risk 53
- triangulation method 195
-
- UBS 46
- UK sovereign sukuk 28
- uncontrollable risk 52
- Unicorn Investment Bank 374, 375
- univariate analysis of variance (ANOVA) 209
- unsystematic risk 52
- US Financial Crimes Enforcement Network 99
- US GAAP standards 100
- US Office of the Comptroller of the Currency 99
- Usmani, Sheikh Muhammad Taqi 170, 174, 175, 176
-
- wa'ad contract 65, 114, 116, 117, 369
- wadiah 25
- wakala 23–4, 30, 168, 265, 319
- Wall Street model , 125, 153, 181, 332, 335, 360, 371
- Weighted Average Cost of Capital (WACC) 46
- WestLB, 103
- Wilks' Lambda 276, 280, 293
- World Bank 36
- World Islamic Economic Forum (WIFE), fifth (2009) 172, 361
- World recession 2009 155f, 158f
-
- Yudhoyono, President Susilo Bambang 172–3, 361
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