Purpose – In light of the current debate on bank capital requirements, the purpose of this paper is to investigate the relative impact of capitalization on risk-taking efficiency in Islamic and conventional banks. The author tests whether changes occurring to the capital structure of such...

Islamic lending transactions are governed by the precepts of the shariah, which bans interest and stipulates that income must be derived as return from entrepreneurial investment. Since Islamic finance is predicated on asset backing and specific credit participation in identified business risk,...

Purpose – In light of the current debate on bank capital requirements, the purpose of this paper is to investigate the relative impact of capitalization on risk‐taking efficiency in Islamic and conventional banks. The author tests whether changes occurring to the capital structure of such...

This study attempts to determine the impact of the reclassification on income smoothing practices by Islamic banks in Malaysia through loss provisions. It is well acknowledged that Islamic banks set up an allowance for loss provisions in order to absorb any future losses. However, alternative...

Islamic banks are exposed to a unique risk such as Displaced Commercial Risk (DCR). DCR arises from the assets managed on behalf of the investment account holders which may be borne by the Islamic bank’s own capital, when the Islamic banks forgo part or all of its share of profits on the...

Purpose – This paper aims to examine the relationship between the volume of investment deposits and capitalization of Islamic commercial banks. Design/methodology/approach – Unlike current accounts holders, investment accounts holders may support part or all of the losses on assets value,...

Purpose – This paper aims to examine the relationship between the volume of investment deposits and capitalization of Islamic commercial banks. Design/methodology/approach – Unlike current accounts holders, investment accounts holders may support part or all of the losses on assets value,...