Islamic Financial Institutions Performance Pre and Post Global Financial crisis 2007/2008: Empirical Insights from Gulf Cooperation Council (GCC)

The East Asian financial crisis in 1997 and later the global financial crisis in 2007 and 2008 had a big impact on the corporate world as many companies and financial institutions collapsed during that period. Poor governance systems and lack of transparency in reporting including lack of risk reporting and disclosure were blamed as the roots of the problem. Conventional financial institutions have widely practiced risk management within their organization, but it is still under-developed in Islamic financial institutions due to new emerging market and unique business structures which are based on Shariah or Islamic law. Therefore, this study examined the risk management disclosure by all 17 Islamic financial institutions in Malaysia from 2006 to 2009, covering the period before, during, and after the global financial crisis. A disclosure checklist consists of mandatory and voluntary items developed to measure the level of risk disclosure. The descriptive result shows the risk management disclosure among the Islamic Financial Institutions was satisfactory. Analysis for a four year period revealed that the risk disclosure has greatly improved before and after crisis indicating that Islamic Financial Institutions have taken the necessary steps to improve their disclosure.

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Sharīʿah-compliant or Sharīʿah-based? The Changing Ethical Discourse of Islamic Finance

Arab Law Quarterly ◽

10.1163/15730255-bja10008 ◽

2020 ◽

Vol 35 (1-2) ◽

pp. 50-73

Author(s):

Ryan Calder

Keyword(s):

Financial Crisis ◽

Financial Institutions ◽

Global Financial Crisis ◽

Islamic Finance ◽

Ethical Discourse ◽

Starting Point ◽

Islamic Financial Institutions ◽

Ethical Project

Abstract Observers call upon Islamic financial institutions to move beyond offering merely Sharīʿah-compliant instruments toward offering more Sharīʿah-based ones. But when did these terms come into usage, and why? What precisely do people mean by ‘Sharīʿah-based’? In this article we argue that the term ‘Sharīʿah-compliant’ emerged in the 1990s and allowed Islamic finance institutions to leave behind scandals of the 1980s, presenting Islamic finance anew as a technically rational project grounded in Sharīʿah expertise. In contrast, the call for Sharīʿah-based finance became popular in the 2000s, and especially after the 2008 global financial crisis, which made systemic stability and product transparency pressing concerns. Usages of ‘Sharīʿah-based’ fall into three categories: those that stress separation from conventional finance, those that stress authenticity, and those that stress welfare. This definitional multiplicity is not a problem but rather a starting point for debate and a sign of Islamic finance’s growing maturity as an ethical project.

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The Global Financial Crisis: Risk, Shareholder Pressure, and Short-Termism in Financial Institutions - Does Enlightened Shareholder Value Offer a Panacea?

SSRN Electronic Journal ◽

10.2139/ssrn.1839305 ◽

2011 ◽

Author(s):

Andrew R. Keay

Keyword(s):

Financial Crisis ◽

Financial Institutions ◽

Global Financial Crisis ◽

Shareholder Value ◽

The Global Financial Crisis ◽

Short Termism

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A Discussion of Aida H. Hozic and Jacqui True’s Scandalous Economics: Gender and the Politics of Financial Crises

Perspectives on Politics ◽

10.1017/s1537592717000184 ◽

2017 ◽

Vol 15 (2) ◽

pp. 503-504

Author(s):

Dara Z. Strolovitch

Keyword(s):

Political Economy ◽

Financial Crisis ◽

Financial Institutions ◽

Financial Crises ◽

Global Financial Crisis ◽

Economic Order ◽

Macroeconomic Models ◽

Gender And Race ◽

Back Cover ◽

The Global Financial Crisis

“Critical analyses of the global financial crisis of 2008 (GFC) have neglected the ways in which structural inequalities around gender and race factor into (and indeed make possible) the current economic order. Scandalous Economics breaks new ground by arguing that an explicitly gendered approach to the GFC and its ongoing effects can help us to understand both the root causes of the crisis and the failure to significantly reform financial institutions and macroeconomic models.” These words, from the blurb on the back cover of Scandalous Economics, nicely summarize the book’s topic and the general approach to it. Because the book contains contributions from a number of the top political scientists writing about the gendering of political economy, and because this topic is such an important one, we have invited a range of political scientists to comment on the book and on the broader theme of the gendering of political economy.

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A Discussion of Aida H. Hozic and Jacqui True’s Scandalous Economics: Gender and the Politics of Financial Crises

Perspectives on Politics ◽

10.1017/s1537592717000214 ◽

2017 ◽

Vol 15 (2) ◽

pp. 511-512

Author(s):

Daniel W. Drezner

Keyword(s):

Political Economy ◽

Financial Crisis ◽

Financial Institutions ◽

Financial Crises ◽

Global Financial Crisis ◽

Economic Order ◽

Macroeconomic Models ◽

Gender And Race ◽

Back Cover ◽

The Global Financial Crisis

“Critical analyses of the global financial crisis of 2008 (GFC) have neglected the ways in which structural inequalities around gender and race factor into (and indeed make possible) the current economic order. Scandalous Economics breaks new ground by arguing that an explicitly gendered approach to the GFC and its ongoing effects can help us to understand both the root causes of the crisis and the failure to significantly reform financial institutions and macroeconomic models.” These words, from the blurb on the back cover of Scandalous Economics, nicely summarize the book’s topic and the general approach to it. Because the book contains contributions from a number of the top political scientists writing about the gendering of political economy, and because this topic is such an important one, we have invited a range of political scientists to comment on the book and on the broader theme of the gendering of political economy.

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The 2008 Global Financial Crisis: Ethic Fail!

Orbit Writing Around Pynchon ◽

10.20919/exs.6.2015.212 ◽

2020 ◽

Vol 6 (1) ◽

pp. 6-26

Author(s):

Rebecca Calvert-Giddings

Keyword(s):

Decision Making ◽

Financial Crisis ◽

Financial Institutions ◽

Ethical Decision ◽

Ethical Decision Making ◽

Global Financial Crisis ◽

Human Ethics ◽

Perfect Storm

What failed in order to cause the 'perfect storm' that lead to the 2008 Global Financial Crisis? Did the leaders, managers and employees of financial institutions have a complete disregard for regulation, a breakdown in human ethics, a contempt for customers, or in fact ignorance to anything apart from profit and bonuses? If so, is increased regulation going to prevent this from happening again? Or is increasing regulation causing a dissociation in staff from ethical decision making and placing an almost co-dependent and ultimately unrealistic reliance on complance and legal departments, which is in turn setting the industry up to fail again?

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Financial stability of Islamic banking and the global financial crisis: Evidence from the Gulf Cooperation Council

Economic Systems ◽

10.1016/j.ecosys.2017.09.001 ◽

2018 ◽

Vol 42 (2) ◽

pp. 346-360 ◽

Cited By ~ 24

Author(s):

Faisal Alqahtani ◽

David G. Mayes

Keyword(s):

Financial Crisis ◽

Financial Stability ◽

Global Financial Crisis ◽

Gulf Cooperation Council ◽

Islamic Banking ◽

The Global Financial Crisis

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An Investigation into the Fundamental Drivers of Pricing of Residential Mortgage Products – A Risk Pricing Viewpoint

Construction Economics and Building ◽

10.5130/ajceb.v10i4.1884 ◽

2010 ◽

Vol 10 (4) ◽

pp. 60-72

Author(s):

Harry M Karamujic

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Financial Institutions ◽

Global Financial Crisis ◽

Exact Science ◽

Residential Mortgage ◽

Risk Pricing ◽

Price Risks ◽

The Global Financial Crisis ◽

Underlying Theme

Residential mortgage products (also known as home loans) pricing has been long understood to be something of a ‘dark art’, requiring judgment and experience, rather than being an exact science. In the last decade, a lot has changed in this field and more and more lenders, primarily the larger lenders, are increasingly looking to make their pricing as exact as possible. Even so, inadequate pricing of residential mortgage products (in particular its substandard risk pricing) has been seen as one of major causes of the global financial crisis (GFC) and subsequent spectacular banking collapses. The underlying theme of the paper is to exhibit how contemporary lenders, in practice, price their residential mortgage products. While discussing elements of the pricing calculation particular attention was given to the exposition of how contemporary lenders price risks involved in providing home loans. Because of the importance of Basel capital accords to how financial institutions assess and quantify their risks, the paper provides an overview of Basel capital accords. The author envisages that the paper will (i) help enhance comprehension of the underlying elements of the pricing calculation and the ways in which these elements relate to each other, (ii) scrutinize how contemporary lenders identify and quantify risks and (iii) improve consciousness of future changes in interest rates

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The more connected, the better? Impact of connectedness on volatility and price discovery in the Korean financial sector

Managerial Finance ◽

10.1108/mf-09-2016-0277 ◽

2018 ◽

Vol 44 (1) ◽

pp. 46-73 ◽

Cited By ~ 3

Author(s):

DeokJong Jeong ◽

Sunyoung Park

Keyword(s):

Financial Crisis ◽

Stock Market ◽

Financial Institutions ◽

Market Microstructure ◽

Stock Price ◽

Price Discovery ◽

Global Financial Crisis ◽

Financial Sector ◽

Asian Crisis ◽

Content Type

Purpose The purpose of this paper is to empirically analyze the effect of the increasing connectedness among financial institutions in the Korean financial market, as it affects the market microstructure in the stock market. Thus this work, first, analyzes the trend and characteristics of connectedness in the Korean financial sector. This work then demonstrates the impacts of connectedness on volatility and price discovery in the stock market. Design/methodology/approach The entire Korean financial sector is analyzed from January 1990 to July 2015, including the periods of the 1997 Asian crisis and the 2007/2008 global financial crisis. This paper quantifies the connectedness between financial institutions using network methodology. Densely connectedness specifically refers to the cases in which a node experiences strong-lagged return spillover from and/or to itself. Findings Connectedness is established as an important determinant of stock price discovery. This paper illustrates that connectedness increases on significant economic events such as the 1997 Asian crisis and the 2007/2008 global financial crisis. Furthermore, this paper demonstrates that the more densely connected a particular financial institution, the more volatile the stock price and the less accurate the stock price quality. Research limitations/implications Understanding the financial system from a network perspective has been on the rise after the 2007/2008 global financial crisis. This work helps regulators and policy makers understand the full implications of introducing new policies that can more closely connect financial institutions. Originality/value This paper precisely captures financial institutions’ connectedness by including all types of financial institutions at the micro level. Additionally, this paper links connectedness to market microstructure in the stock market.

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