EXPLORING RISK MANAGEMENT IN MALAYSIAN ISLAMIC BANKING – POST FINANCIAL CRISIS LENS
Risk management of Islamic banks had been a popular subject since the recent global financial crisis as they portrayed stronger resilience against the crisis. Factors such as asset-based financing and low bank's leverage level which is required under Islamic finance framework had itself being t...
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| Format: | Dissertation (University of Nottingham only) |
| Language: | English |
| Published: |
2012
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| Online Access: | https://eprints.nottingham.ac.uk/25758/ |
| _version_ | 1848793047947542528 |
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| author | Aman, Nur Amiza |
| author_facet | Aman, Nur Amiza |
| author_sort | Aman, Nur Amiza |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | Risk management of Islamic banks had been a popular subject since the recent global financial crisis as they portrayed stronger resilience against the crisis. Factors such as asset-based financing and low bank's leverage level which is required under Islamic finance framework had itself being the risk mitigation mechanism. Even though IBs on general basis were not significantly affected by recent crisis, there are lessons to be learnt in order to avoid such crisis in the future.
This paper will firstly discuss the uniqueness of risks involved in Islamic banking operations and how different their risk management is before coming to the main objective of this paper which is to investigate the improvement made to the risk management in Islamic banks post financial crisis. In addition, this paper will also discuss the challenges in risk management of Islamic banks as well as the sustainability of Islamic banks towards similar crisis in the future. A series of interviews has been conducted with various industry experts to gauge their opinion of risks management of Malaysian Islamic banks prior and after the global financial crisis.
The research findings support the notion of stronger resilience of Islamic banks towards recent financial crisis. This is due to fewer exposures to toxic assets which had triggered the financial crisis due to prohibition by Shariah framework. However, there is a notable current trend of Islamic banks introducing instruments that complied with Shariah requirements but featured similar risk characteristics as those toxic assets. In this regard, other than the implementation of Basel III and Shariah Governance Framework 2010, it appears that there is no other significant improvement made on the regulatory requirements on risk management of Islamic banks post financial crisis that can help to avoid similar crisis in the future. However, we took note of the closer supervision on banking industry as a whole following the financial crisis. It also appears that Islamic banks need to strengthen their risk management practices which include the role of Shariah advisors. |
| first_indexed | 2025-11-14T18:54:06Z |
| format | Dissertation (University of Nottingham only) |
| id | nottingham-25758 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T18:54:06Z |
| publishDate | 2012 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-257582018-01-01T21:35:46Z https://eprints.nottingham.ac.uk/25758/ EXPLORING RISK MANAGEMENT IN MALAYSIAN ISLAMIC BANKING – POST FINANCIAL CRISIS LENS Aman, Nur Amiza Risk management of Islamic banks had been a popular subject since the recent global financial crisis as they portrayed stronger resilience against the crisis. Factors such as asset-based financing and low bank's leverage level which is required under Islamic finance framework had itself being the risk mitigation mechanism. Even though IBs on general basis were not significantly affected by recent crisis, there are lessons to be learnt in order to avoid such crisis in the future. This paper will firstly discuss the uniqueness of risks involved in Islamic banking operations and how different their risk management is before coming to the main objective of this paper which is to investigate the improvement made to the risk management in Islamic banks post financial crisis. In addition, this paper will also discuss the challenges in risk management of Islamic banks as well as the sustainability of Islamic banks towards similar crisis in the future. A series of interviews has been conducted with various industry experts to gauge their opinion of risks management of Malaysian Islamic banks prior and after the global financial crisis. The research findings support the notion of stronger resilience of Islamic banks towards recent financial crisis. This is due to fewer exposures to toxic assets which had triggered the financial crisis due to prohibition by Shariah framework. However, there is a notable current trend of Islamic banks introducing instruments that complied with Shariah requirements but featured similar risk characteristics as those toxic assets. In this regard, other than the implementation of Basel III and Shariah Governance Framework 2010, it appears that there is no other significant improvement made on the regulatory requirements on risk management of Islamic banks post financial crisis that can help to avoid similar crisis in the future. However, we took note of the closer supervision on banking industry as a whole following the financial crisis. It also appears that Islamic banks need to strengthen their risk management practices which include the role of Shariah advisors. 2012-09-18 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/25758/2/Final_dissertation_complete_NAA_2012.pdf Aman, Nur Amiza (2012) EXPLORING RISK MANAGEMENT IN MALAYSIAN ISLAMIC BANKING – POST FINANCIAL CRISIS LENS. [Dissertation (University of Nottingham only)] (Unpublished) |
| spellingShingle | Aman, Nur Amiza EXPLORING RISK MANAGEMENT IN MALAYSIAN ISLAMIC BANKING – POST FINANCIAL CRISIS LENS |
| title | EXPLORING RISK MANAGEMENT IN MALAYSIAN ISLAMIC BANKING – POST FINANCIAL CRISIS LENS |
| title_full | EXPLORING RISK MANAGEMENT IN MALAYSIAN ISLAMIC BANKING – POST FINANCIAL CRISIS LENS |
| title_fullStr | EXPLORING RISK MANAGEMENT IN MALAYSIAN ISLAMIC BANKING – POST FINANCIAL CRISIS LENS |
| title_full_unstemmed | EXPLORING RISK MANAGEMENT IN MALAYSIAN ISLAMIC BANKING – POST FINANCIAL CRISIS LENS |
| title_short | EXPLORING RISK MANAGEMENT IN MALAYSIAN ISLAMIC BANKING – POST FINANCIAL CRISIS LENS |
| title_sort | exploring risk management in malaysian islamic banking – post financial crisis lens |
| url | https://eprints.nottingham.ac.uk/25758/ |