TY - JOUR
T1 - The impact of Basel III regulations on solvency and credit risk-taking behavior of Islamic banks
AU - Addou, Khadija Ichrak
AU - Boulanouar, Zakaria
AU - Anwer, Zaheer
AU - Bensghir, Afaf
AU - Ramadilli Mohammad, Shamsher Mohamad
N1 - Publisher Copyright:
© 2024, Emerald Publishing Limited.
PY - 2024/8/29
Y1 - 2024/8/29
N2 - Purpose: This study aims to examine the simultaneous effect of variations in the Capital Adequacy Ratio and Credit Risk of Islamic banks of the Gulf Cooperation Council under the influence of the Basel III regulations using an innovative approach. Design/methodology/approach: This approach highlights the critical importance of the Basel III reform in preserving the stability of the regional and international financial sector in the Gulf Cooperation Council and globally by examining the complex dynamics between Capital Adequacy Ratio and Credit Risk and their interaction under regulatory constraints. The annual reports and financial performance of 26 Islamic banks were analyzed over the period 2013–2021. Findings: The findings highlight the critical importance of the Basel III reform in preserving the stability of the regional and international financial sector in the Gulf Cooperation Council and globally by examining the complex dynamics between Capital Adequacy Ratio and Credit Risk and their interaction under regulatory constraints. The annual reports and financial performance of 26 Islamic banks were analyzed over the period 2013–2021. Originality/value: The insights from findings help define effective strategies to manage and mitigate Credit Risk while strengthening solvency under Basel III prudential supervision. Policymakers, regulatory authorities and banking institutions can optimize the management of Credit Risk and create a robust and stable financial environment for Islamic banks.
AB - Purpose: This study aims to examine the simultaneous effect of variations in the Capital Adequacy Ratio and Credit Risk of Islamic banks of the Gulf Cooperation Council under the influence of the Basel III regulations using an innovative approach. Design/methodology/approach: This approach highlights the critical importance of the Basel III reform in preserving the stability of the regional and international financial sector in the Gulf Cooperation Council and globally by examining the complex dynamics between Capital Adequacy Ratio and Credit Risk and their interaction under regulatory constraints. The annual reports and financial performance of 26 Islamic banks were analyzed over the period 2013–2021. Findings: The findings highlight the critical importance of the Basel III reform in preserving the stability of the regional and international financial sector in the Gulf Cooperation Council and globally by examining the complex dynamics between Capital Adequacy Ratio and Credit Risk and their interaction under regulatory constraints. The annual reports and financial performance of 26 Islamic banks were analyzed over the period 2013–2021. Originality/value: The insights from findings help define effective strategies to manage and mitigate Credit Risk while strengthening solvency under Basel III prudential supervision. Policymakers, regulatory authorities and banking institutions can optimize the management of Credit Risk and create a robust and stable financial environment for Islamic banks.
KW - Basel 3
KW - Capital adequacy ratio
KW - Credit risk
KW - Islamic banks
KW - Prudential regulation
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U2 - 10.1108/IMEFM-05-2024-0248
DO - 10.1108/IMEFM-05-2024-0248
M3 - Article
AN - SCOPUS:85202179082
SN - 1753-8394
VL - 17
SP - 915
EP - 935
JO - International Journal of Islamic and Middle Eastern Finance and Management
JF - International Journal of Islamic and Middle Eastern Finance and Management
IS - 5
ER -