Islamic finance in Europe (10)

Continuation

SUMMARY

As regards the former, with a few exceptions, existing studies that predate the crisis indicate that there are no significant differences between:

·       Islamic banks;

·       and conventional banks

as far as their business orientation and efficiency is concerned.

In contrast, most recent studies including data for the crisis period tend to stress that, during the financial crisis, Islamic banks had more difficulties than conventional banks in maintaining their:

·       efficiency;

·       and profitability.

Meanwhile, as concerns the latter issue, empirical evidence based on firm-level data shows that Islamic financing is half less risky than conventional financing.

Moreover, various studies have documented the high growth of Islamic bank assets during the financial crisis.

From the research paper of European Central Bank

(Authors: F.Mauro, P.Caristi, S.Couderc, A.D.Maria, L.Ho, B.K.Grewal, S.Masciantonio, S. Ongena and S.Zaher)