Conceptual framework on risk-based supervision of Islamic Banks: a proposed risk-based supervisory framework
The main objective of this conceptual study is to propose an ideal risk-based supervisory framework for Islamic banks that recognises the specificities of Islamic banks. Thus, it gives a more accurate assessment of their financial health (risk profile) as opposed to using current conventional b...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Smart Ever Konferans Organizasyon Limited Sirketi
2020
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| Subjects: | |
| Online Access: | http://irep.iium.edu.my/82693/ http://irep.iium.edu.my/82693/1/Published%20Journal%20Article%20-%20IJRTESH.pdf |
| Summary: | The main objective of this conceptual study is
to propose an ideal risk-based supervisory framework
for Islamic banks that recognises the specificities of
Islamic banks. Thus, it gives a more accurate assessment
of their financial health (risk profile) as opposed to using
current conventional banking based frameworks to
assess Islamic banks. The methodology adopted has been
a qualitative approach through a critical in-depth review
of literature related to the area of study based on
available secondary data to generate valuable insights.
The expected implication and contribution of the
framework is that Islamic banks will be better
supervised by regulators which will lead to safer Islamic
banks and in turn promote the safety and soundness of
the financial system at large. The study will also aid
Islamic banks to better understand and manage the
unique risks inherent in their line of business (Islamic
banking). This paper also contributes to alleviating the
current dearth of academic literature on the crucial
regulatory subject of risk-based supervision in the
Islamic finance industry. |
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