Islamic Financial Institutions and Products in the Global Financial System: Key Issues in Risk Management and Challenges Ahead

By V. Sundararajan, L. Errico. Social Science Research Network, 2002

361 citations recorded by the source corpus.

The provision and use of financial services and products that conform to Islamic religious principles pose special challenges for the identification, measurement, monitoring, and control of underlying risks. Effective and efficient risk management in Islamic financial institutions has assumed particular importance as they endeavor to cope with the challenges of globalization. This requires the development of not only a more suitable regulatory framework, but also new financial instruments and institutional arrangements to provide an enabling operational environment for Islamic finance. The recent establishment of the Islamic Financial Services Board, facilitated by the IMF, addresses these needs.

Subfields: Accounting, Economics and Econometrics

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Citations in the corpus

Risk in Islamic Banking (2012, background): “It may weaken their incentives for due diligence and loan monitoring, since Islamic banks can transfer credit risk to investment account holders who do not have the same rights as equity holders but share the same risk (Sundararajan and Errico, 2002).”
Developments in Risk Management in Islamic Finance: A Review (2019, methodology): “The specific nature of risk and the unlimited number of ways in which a project can be financed using either profit- or loss-sharing or non-profit or loss-sharing contracts forces IBs to take more risks than CBS take (Sundararajan and Errico 2002).”
ISLAMIC BANKS AND FINANCIAL STABILITY: A COMPARATIVE EMPIRICAL ANALYSIS BETWEEN MENA AND SOUTHEAST ASIAN COUNTRIES (2013, background): “A large body of descriptive literature discusses risks in Islamic banking (Sundararajan and Errico, 2002; Grais and Kulathunga, 2006; Grais and Pellegrini, 2006) but does so in theoretical terms, while empirical papers focus on Islamic and conventional banking efficiency (Yudistira, 2004; Hamim,…”
Islamic versus conventional banks in the GCC countries: A comparative study using classification techniques (2015, background): “The main sizeable body of research has explained the general Islamic principles and the instruments used in Islamic banking (Bashir, 1983; Khan, 1985; Sundararajan and Errico, 2002; Siddiqui, 2006).”
Islamic Financial Institutions and Corporate Governance: New Insights for Agency Theory (2009, background): “…the SSB, bank strategies, risk factors, internal controls, performance, fatwas (legal pronouncements or opinions), and information on the governance structure (Abdel Karim and Archer 2002; Sundararajan and Errico, 2002; Islamic Financial Services Board, 2005b; Grais and Pellegrini, 2006a).”
Risk in Islamic banking and corporate governance (2018, background): “The likelihood of operational risk is also high in non-PLS financing modes (e.g. leasing contracts) since Islamic banks assume ownership of assets or commodities and all risks associated with the ownership (e.g. price risk) until the end of the contract period (Sundararajan and Errico, 2002).”
Islamic Banking and Finance: Recent Empirical Literature and Directions for Future Research (2015, neutral): “The International Monetary Fund and the World Bank also recognized Islamic financial products as alternative means of financial intermediation (Sundararajan and Errico, 2002; World Bank, 2013).”
Risks of Sukuk structures: Implications for resource mobilization (2007, background): “…2007 …the convenience with which the Shariah compliance requirements can be married with the conditions of market competitiveness will remain a great challenge for the sukuk issuances. tary policy instruments compatible with Shariah (see Sundararajan & Luca, 2002; Sundararajan et al., 1998).”
Diversity in the regulation of Islamic Financial Institutions (2007, background): “To capitalize on the potential of that market, a number of global financial institutions – including Citibank, Hong Kong Shanghai Banking Corporation (HSBC), Goldman Sachs, BNP-Paribas and Union Bank of Switzerland (UBS) – have established Shariah compatible services (Sundararajan & Errico, 2002).”
Regulating Islamic Financial Institutions: The Nature of the Regulated (2004, background): “It is also reported that this bank was subject to temporary takeover by the Central Bank of Egypt; see Warde (2000). 40 Khan & Ahmed (2001).”