This guide provides an integrated, structured process for managing risks in Islamic banks. It includes risk identification, measurement and mitigation, and compares risk management in conventional and Islamic banks.
Edinburgh Guides to Islamic Finance
Series Editor: Rodney Wilson
Edinburgh Guides to Islamic Finance is a series of short guides to key areas in Islamic finance, offering an independent academic perspective and a critical treatment.
The global financial crisis of 2008 has increased the need for risk management in Islamic banks. However, the process is complicated: Islamic banks worldwide provide diverse financial facilities and services under one roof, yet lack a uniform risk map and a structured risk management framework.
This guide provides a structured process (including risk identification, measurement and mitigation) for managing risks in Islamic banks, and presents highlights of risk management in conventional banks. It uses simulated Islamic bank financial statements to demonstrate the integrated risk management process, and investigates risk regulatory insights which have implications for banking policy.
Key Features
. Covers the critical aspects of the subject: credit or default risk, liquidity risk, market risk, operational risk, Shari'ah risk and displaced commercial risk
. Presents risk analysis and mitigation on the contract level and the overall bank level
. Uses a simulated Islamic bank with its key financial statements: balance sheet, income statement and profit distribution model
. Provides a risk coding system that facilitates risk management and reporting systems
. Features a glossary of key Arabic terms and abbreviations
Rania Abdelfattah Salem is a Lecturer in Finance at the German University in Cairo.
Cover design:
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