Banking Governance, Performance and Risk-Taking: Conventional Banks vs Islamic Banks (Innovation, Entrepreneurship and Management)

Development of emerging countries is often enabled through non-conventional finance. Indeed, the prohibition of interest and some other impediments require understanding conventional finance and Islamic finance, which both seek to be ethical and socially responsible. Thus, comparing and understanding the features of Islamic banking and conventional banking, in a globalized economy, is fundamental. This book explains the features of both conventional and Islamic banking within the current international context. It also provides a comparative view of banking governance, performance and risk-taking of both finance systems. It will be of particular use to practitioners and researchers, as well as to organizations and companies who are interested in conventional and Islamic banking. Development of emerging countries is often enabled through non-conventional finance. Indeed, the prohibition of interest and some other impediments require understanding conventional finance and Islamic finance, which both seek to be ethical and socially responsible. Thus, comparing and understanding the features of Islamic banking and conventional banking, in a globalized economy, is fundamental. / /This book explains the features of both conventional and Islamic banking within the current international context. It also provides a comparative view of banking governance, performance and risk-taking of both finance systems. It will be of particular use to practitioners and researchers, as well as to organizations and companies who are interested in conventional and Islamic banking 10.1002@9781119361480.ch0.pdf (p.1-16) 1 Half-Title Page 1 Title Page 2 Copyright Page 3 Contents 4 Preface 9 Introduction 11 10.1002@9781119361480.ch0a.pdf (p.17) 17 PART 1. From Corporate Governance to Banking Governance 17 10.1002@9781119361480.ch1.pdf (p.18-43) 18 1. Corporate Governance: A Brief Literature Review 18 1.1. The features of corporate governance 18 1.1.1. Definitions of corporate governance 18 1.1.2. Nature of the agency problem 21 1.1.3. Origins of the agency problem 21 1.1.4. Solutions 24 1.2. Fundamental theories of corporate governance 27 1.2.1. Transaction cost theory 27 1.2.2. Agency theory 28 1.2.3. Stewardship theory 30 1.2.4. Stakeholder theory 32 1.2.5. Resource dependency theory 33 1.2.6. Political theory 34 1.3. Corporate governance and ethics 35 1.3.1. Ethics in Islamic finance 36 1.4. Corporate governance and psychological biases 39 1.4.1. Transnational governance 42 10.1002@9781119361480.ch2.pdf (p.44-65) 44 2. Banking Governance 44 2.1. Banking 45 2.1.1. What is banking? 45 2.1.2. Banking structure 45 2.1.3. Universal banking 46 2.1.4. Bank holding companies 47 2.1.5. Offshore banks 47 2.2. Central banks 49 2.2.1. Monetary control or price stability 49 2.2.2. Prudential control 49 2.2.3. Government debt placement 51 2.3. Special features of banks 54 2.3.1. Special activities of banks 54 2.3.2. Special problems of banks 56 2.4. Special features of banking governance 61 2.4.1. Banking governance 61 2.4.2. Information asymmetries 62 2.4.3. Moral hazard 64 10.1002@9781119361480.ch3.pdf (p.66-102) 66 3. Islamic Banking Governance 66 3.1. Specific products of Islamic banking 66 3.2. Financial transactions of Islamic banks with the bank’s participation 67 3.2.1. Mudarbah (profit sharing) 68 3.2.2. Musharkah (joint venture) 70 3.3. Financial transactions of Islamic banks without the bank’s participation 73 3.3.1. Murabahah (cost plus) 73 3.3.2. Musawamah 74 3.3.3. Ijarah 74 3.3.4. Bai al-inah (sale and buy back agreement) 76 3.3.5. Bai’ Bithaman Ajil (deferred payment sale) 76 3.3.6. Bai Muajjal (credit sale) 76 3.3.7. Bai Salam 77 3.3.8. Hibah (gift) 79 3.3.9. Qard Hassan (good loan) 80 3.3.10. Wadiah (safekeeping) 80 3.3.11. Sukuk (Islamic bonds) 80 3.3.12. Takaful (Islamic insurance) 83 3.3.13. Wakalah (agency) 84 3.3.14. Tawarruq 84 3.3.15. Deposits 85 3.3.16. Islamic investment funds 87 3.4. Overview of Islamic banking 88 3.4.1. Classical Islamic banking 88 3.4.2. Modern Islamic banking 89 3.5. The Islamic development bank 94 3.6. Features of Islamic banking governance 96 10.1002@9781119361480.ch4.pdf (p.103-127) 103 4. Mechanisms of Corporate Governance, Banking Governance and Islamic Banking Governance 103 4.1. Mechanisms of corporate governance 103 4.1.1. Internal mechanisms 104 4.1.2. External mechanisms 113 4.2. Mechanisms of banking governance 116 4.2.1. Internal mechanisms 116 4.2.2. External mechanisms 120 4.3. Mechanisms of Islamic banking governance 123 4.3.1. Shariah supervisory boards 123 4.3.2. The Shariah review units 124 4.3.3. The Islamic Financial Services Board 127 4.3.4. The Islamic International Rating Agency 127 10.1002@9781119361480.ch4a.pdf (p.128) 128 PART 2. Banking Performance 128 10.1002@9781119361480.ch5.pdf (p.129-153) 129 5. Performance Measurement 129 5.1. Performance measurement: definitions 129 5.2. Performance measurement tools 131 5.2.1. Classical methods 132 5.2.2. Modern methods 150 10.1002@9781119361480.ch6.pdf (p.154-165) 154 6. Corporate Governance and Performance 154 6.1. Ownership structure and performance 155 6.1.1. CEO ownership 158 6.2. Board structure and performance 159 6.2.1. Board size 161 6.2.2. CEO duality 163 6.3. Incentive pay and performance 164 6.4. Legal protection and performance 164 6.5. Audit committee and performance 164 10.1002@9781119361480.ch6a.pdf (p.166) 166 PART 3. Banking Risk-Taking 166 10.1002@9781119361480.ch7.pdf (p.167-174) 167 7. Banking Governance and Performance 167 7.1 Board composition in banking 167 7.2. Ownership structure 168 7.3. Incentive pay 170 7.4. Regulation and supervision 172 7.5. BCBS 174 10.1002@9781119361480.ch8.pdf (p.175-181) 175 8. Banking Risk Analysis 175 8.1. Risk exposure for conventional banks 175 8.1.1. Definition of risk 175 8.2. Risk exposure for Islamic banks 179 10.1002@9781119361480.ch9.pdf (p.182-214) 182 9. Banking Risk Management 182 9.1. Traditional risk management techniques 182 9.1.1. Asset–liability management 182 9.1.2. Financial derivatives 187 9.2. International risk management tools 189 9.2.1. Basel I 189 9.2.2. Basel II 192 9.2.3. Basel III 193 9.3. Market risk management 194 9.3.1. Risk-adjusted return on capital 194 9.3.2. Market VAR 195 9.3.3. Monte Carlo methods 196 9.3.4. The beta method 197 9.4. Credit risk management 197 9.4.1. Minimizing credit risk 197 9.4.2. Assessing the default risk 199 9.4.3. Credit VAR 201 9.5. Management of operational risk 201 9.5.1. Qualitative methods 202 9.5.2. Quantitative methods 207 9.6. Board responsibilities in risk management 210 9.7. Manager responsibilities in risk management 211 9.8. Islamic banking risk management 212 9.8.1. IFSB principles of credit risk management 212 9.8.2. IFSB principles of liquidity risk management 213 9.8.3. FSB principle of market risk management 213 9.8.4. Operational risk management 213 10.1002@9781119361480.ch10.pdf (p.215-224) 215 10. Corporate Governance and Risk-Taking 215 10.1. Board of supervisors and risk-taking 215 10.2. Regulation: supervision and risk-taking 217 10.3. Ownership and risk-taking 221 10.4. Audit committee and risk-taking 223 10.5. Incentive pay and risk-taking 223 10.1002@9781119361480.ch11.pdf (p.225-226) 225 Conclusion 225 10.1002@9781119361480.ch12.pdf (p.227-254) 227 Bibliography 227 10.1002@9781119361480.ch13.pdf (p.255-258) 255 Glossary 255 10.1002@9781119361480.ch14.pdf (p.259-260) 259 Index 259 10.1002@9781119361480.ch15.pdf (p.261-264) 261 Other titles from iSTE in Innovation, Entrepreneurship and Management 261 www.ebook3000.com Development Of Emerging Countries Is Often Done Through Non-conventional Finance. The Prohibition Of Interest And Some Other Impediments Require Understanding Of Conventional Finance And Islamic Finance. Both Are Looking For Ethical Finance Which Is Socially Responsible. This Book Explains The Features Of Both Conventional And Islamic Banking Including The Current International Context; It Also Provides A Comparative View Of Banking Governance, Performance And Risk-taking By Both. From Corporate Governance To Banking Governance -- From Corporate Governance To Banking Governance. Corporate Governance: A Brief Literature Review -- Banking Governance -- Islamic Banking Governance -- Mechanisms Of Corporate Governance, Banking Governance And Islamic Banking Governance -- Banking Performance -- Banking Performance. Performance Measurement -- Corporate Governance And Performance -- Banking Risk-taking -- Banking Risk-taking. Banking Governance And Performance -- Banking Risk Analysis -- Banking Risk Management -- Corporate Governance And Risk-taking. Faten Ben Bouheni, Chantal Ammi, Aldo Levy. Includes Bibliographical References (pages [217]-246) And Index. La 4e de couverture indique : "Development of emerging countries is often enabled through non-conventional finance. Indeed, the prohibition of interest and some other impediments require understanding conventional finance and Islamic finance, which both seek to be ethical and socially responsible. Thus, comparing and understanding the features of Islamic banking and conventional banking, in a globalized economy, is fundamental. This book explains the features of both conventional and Islamic banking within the current international context. It also provides a comparative view of banking governance, performance and risk-taking of both finance systems. It will be of particular use to practitioners and researchers, as well as to organizations and companies who are interested in conventional and Islamic banking." -Don't be so judgmental!- -Why are Christians so intolerant?- -Why can't we just coexist?- In an age in which preference has replaced morality, many people find it difficult to speak the truth, afraid of the reactions they will receive if they say something is right or wrong. Using engaging stories and personal experience, Edward Sri helps us understand the classical view of morality and equips us to engage relativism, appealing to both the head and the heart. Learn how Catholic morality is all about love, why making a judgment is not judging a person's soul, and why, in the words of Pope Francis, -relativism wounds people.- Topics include: - Real Freedom, Real Love - Sharing truth with compassion - Why -I disagree- doesn't mean -I hate you- Cover -- Title Page -- Copyright -- Contents -- Preface -- Introduction -- PART 1. From Corporate Governance to Banking Governance -- 1. Corporate Governance: A Brief Literature Review -- 1.1. The features of corporate governance -- 1.1.1. Definitions of corporate governance -- 1.1.2. Nature of the agency problem -- 1.1.3. Origins of the agency problem -- 1.1.4. Solutions -- 1.2. Fundamental theories of corporate governance -- 1.2.1. Transaction cost theory -- 1.2.2. Agency theory -- 1.2.3. Stewardship theory -- 1.2.4. Stakeholder theory -- 1.2.5. Resource dependency theory