Risk management in Islamic banks: A Panel Data Analysis 2011-2021

Mahi, Nadia; Bezzaouya, Mohammed

les cahiers du mecas
Volume 18, Numéro 2, Pages 67-82
2022-12-15

Risk Management In Islamic Banks: A Panel Data Analysis 2011-2021

Authors : Mahi Nadia . Bezzaouya Mohammed .

Abstract

Banking and financial operations in recent years have witnessed many important changes, which were the main reason for the occurrence of financial and banking crises. This phenomenon change lead to the necessity to develop mechanisms related to risk management in all banking appeared, even in Islamic institutions. The main objective of this paper is to test the efficiency of risk management in Islamic banks through the capital adequacy ratio, for a sample of six Islamic banks across a time series extending from 2011 to 2021, using standard techniques for panel data. The results of this study indicate that credit risk, return on equity affect negatively the capital adequacy of Islamic banks, while return on asset, operational risk and liquidity risk, they have insignificant impact on the capital adequacy.