Banking Regulation and Financial Soundness Nexus in View of the Crisis: An Islamic Banking Perspective

International Journal of Economics and Financial Issues Pub Date : 2024-03-18 DOI:10.32479/ijefi.15760

Yomna Daoud, A. Kammoun

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Abstract

The COVID-19 pandemic significantly affected global finances and economies, posing a risk of global GDP decline. This research examines the soundness and dynamics of Islamic banks from 2017Q1 to 2023Q1. The study focuses on eight countries selected based on the systemic importance of their Islamic banks: Saudi Arabia, UAE, Bahrain, Oman, Pakistan, Malaysia, Brunei, and Indonesia. The analysis is based on several key indicators including size, profitability, non-performing financing, and capital adequacy. Our analysis shows that the Islamic banks' response to the pandemic is not uniform across jurisdictions. Saudi Arabia and Southeast Asian countries (Malaysia and Indonesia) are expected to remain stable. This reflects the Islamic banks' desire to integrate more closely into the global financial system by holding higher capital adequacy ratios. Effective banking regulation is necessary to ensure the stability and credibility of the financial industry. Other regions may face challenges that require additional policies to ensure the stability of their Islamic banking sectors. Several financial soundness indicators and jurisdictions have shown notable improvements, with some levels reaching pre-pandemic levels. This reflects the effectiveness of the COVID-19 policy support measures implemented since 2020.

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危机背景下的银行监管与金融稳健关系：伊斯兰银行业的视角

COVID-19 大流行严重影响了全球金融和经济，带来了全球 GDP 下降的风险。本研究考察了 2017Q1 至 2023Q1 伊斯兰银行的稳健性和动态。研究重点是根据伊斯兰银行的系统重要性选出的八个国家：沙特阿拉伯、阿联酋、巴林、阿曼、巴基斯坦、马来西亚、文莱和印度尼西亚。分析基于几个关键指标，包括规模、盈利能力、不良融资和资本充足率。我们的分析表明，不同地区的伊斯兰银行对这一流行病的反应并不一致。沙特阿拉伯和东南亚国家（马来西亚和印度尼西亚）预计将保持稳定。这反映出伊斯兰银行希望通过提高资本充足率来更紧密地融入全球金融体系。有效的银行监管对于确保金融业的稳定性和可信度十分必要。其他地区可能面临挑战，需要采取更多政策来确保其伊斯兰银行业的稳定。一些金融稳健性指标和辖区的情况有了明显改善，一些指标达到了大流行前的水平。这反映了自 2020 年以来实施的 COVID-19 政策支持措施的有效性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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International Journal of Economics and Financial Issues

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期刊介绍： International Journal of Economics and Financial Issues (IJEFI) is the international academic journal, and is a double-blind, peer-reviewed academic journal publishing high quality conceptual and measure development articles in the areas of economics, finance and related disciplines. The journal has a worldwide audience. The journal''s goal is to stimulate the development of economics, finance and related disciplines theory worldwide by publishing interesting articles in a highly readable format. The journal is published Bimonthly (6 issues per year) and covers a wide variety of topics including (but not limited to): Macroeconomcis International Economics Econometrics Business Economics Growth and Development Regional Economics Tourism Economics International Trade Finance International Finance Macroeconomic Aspects of Finance General Financial Markets Financial Institutions Behavioral Finance Public Finance Asset Pricing Financial Management Options and Futures Taxation, Subsidies and Revenue Corporate Finance and Governance Money and Banking Markets and Institutions of Emerging Markets Public Economics and Public Policy Financial Economics Applied Financial Econometrics Financial Risk Analysis Risk Management Portfolio Management Financial Econometrics.