Can Islamic banking ever become Islamic?

    Research output: Contribution to journalArticleResearchpeer-review

    21 Citations (Scopus)

    Abstract

    This paper attempts to explain the dominance of asset side debt contracts in Islamic banks, even though many consider alternative Islamic joint venture (IJV) contracts to be the ideal Islamic financing mode. Theoretical models based on asymmetric information are used to argue that adverse selection and moral hazard alone cannot explain this phenomenon. The model is augmented with risk averse depositors to show that the emergence of asset side IJV could be deterred by Islamic banks liability side. This paper suggests that for IJV, affiliated venture capital and private equity might prove more successful institutions than banking.
    Original languageEnglish
    Pages (from-to)253 - 272
    Number of pages20
    JournalPacific Basin Finance Journal
    Volume34
    DOIs
    Publication statusPublished - 2015

    Cite this

    @article{85071b4c74b14663ad594e7aa7ac3ff0,
    title = "Can Islamic banking ever become Islamic?",
    abstract = "This paper attempts to explain the dominance of asset side debt contracts in Islamic banks, even though many consider alternative Islamic joint venture (IJV) contracts to be the ideal Islamic financing mode. Theoretical models based on asymmetric information are used to argue that adverse selection and moral hazard alone cannot explain this phenomenon. The model is augmented with risk averse depositors to show that the emergence of asset side IJV could be deterred by Islamic banks liability side. This paper suggests that for IJV, affiliated venture capital and private equity might prove more successful institutions than banking.",
    author = "Saad Azmat and Skully, {Michael Thomas} and Brown, {Kym Eva}",
    year = "2015",
    doi = "10.1016/j.pacfin.2015.03.001",
    language = "English",
    volume = "34",
    pages = "253 -- 272",
    journal = "Pacific Basin Finance Journal",
    issn = "0927-538X",
    publisher = "Elsevier",

    }

    Can Islamic banking ever become Islamic? / Azmat, Saad; Skully, Michael Thomas; Brown, Kym Eva.

    In: Pacific Basin Finance Journal, Vol. 34, 2015, p. 253 - 272.

    Research output: Contribution to journalArticleResearchpeer-review

    TY - JOUR

    T1 - Can Islamic banking ever become Islamic?

    AU - Azmat, Saad

    AU - Skully, Michael Thomas

    AU - Brown, Kym Eva

    PY - 2015

    Y1 - 2015

    N2 - This paper attempts to explain the dominance of asset side debt contracts in Islamic banks, even though many consider alternative Islamic joint venture (IJV) contracts to be the ideal Islamic financing mode. Theoretical models based on asymmetric information are used to argue that adverse selection and moral hazard alone cannot explain this phenomenon. The model is augmented with risk averse depositors to show that the emergence of asset side IJV could be deterred by Islamic banks liability side. This paper suggests that for IJV, affiliated venture capital and private equity might prove more successful institutions than banking.

    AB - This paper attempts to explain the dominance of asset side debt contracts in Islamic banks, even though many consider alternative Islamic joint venture (IJV) contracts to be the ideal Islamic financing mode. Theoretical models based on asymmetric information are used to argue that adverse selection and moral hazard alone cannot explain this phenomenon. The model is augmented with risk averse depositors to show that the emergence of asset side IJV could be deterred by Islamic banks liability side. This paper suggests that for IJV, affiliated venture capital and private equity might prove more successful institutions than banking.

    U2 - 10.1016/j.pacfin.2015.03.001

    DO - 10.1016/j.pacfin.2015.03.001

    M3 - Article

    VL - 34

    SP - 253

    EP - 272

    JO - Pacific Basin Finance Journal

    JF - Pacific Basin Finance Journal

    SN - 0927-538X

    ER -