Search results

1 – 10 of over 1000
To view the access options for this content please click here
Article
Publication date: 19 June 2009

Christos Alexakis and Alexandros Tsikouras

The purpose of this paper is to provide an overview of the regulatory framework and key regulatory institutions and industry associations in Islamic finance today and…

Abstract

Purpose

The purpose of this paper is to provide an overview of the regulatory framework and key regulatory institutions and industry associations in Islamic finance today and highlight areas that merit increased attention.

Design/methodology/approach

A wide range of bibliography was reviewed, with particular focus on the standards published by the Islamic Financial Services Board and the Accounting and Auditing Organization for Islamic Financial Institutions. Regulatory topics of particular interest in the Islamic financial world are reviewed. An overview of the main Islamic regulatory institutions is provided. The paper ends with a set of hypotheses requiring further research.

Findings

The paper finds that the growth of the Islamic finance sector may be impacted by the: increased involvement in Islamic finance by Western regulators, as well as credit rating agencies; existence of sound accounting procedures; increased protection of stakeholders of Islamic Financial Institutions.

Originality/value

This paper provides useful information on the current status of the regulatory framework in Islamic finance and highlights areas for further research for academics and professionals alike.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 2 no. 2
Type: Research Article
ISSN: 1753-8394

Keywords

To view the access options for this content please click here
Article
Publication date: 1 April 1998

I. Toutounchian

In standard discussions (capitalistic economy), business firms and the income‐distribution property of production factors are dealt with in a manner in which they are…

Abstract

In standard discussions (capitalistic economy), business firms and the income‐distribution property of production factors are dealt with in a manner in which they are independent from each other and there is no interaction as such between them. Furthermore, no role whatso‐ever is assumed for externalities. If we accept that there is interaction between production factors and these factors because of the existence of externalities affects each other, therefore it is only natural to come to this conclusion that both the definition of business firm and the share of production factors should be changed. The proposal developed in this paper is based on this very important consideration. The profit share of Mudareb (profit‐sharing agent) has been used in this paper to cover more general issues, such as labor's income share in an Islamic system. The Mudareb's relative share might be justified on the grounds that he has the appropriate expertise, profession, so to speak. This justification can be extended to “labor” in general, be it in industry, services, and other economic activities. It seems that, it is not only the degree of expertise and skill which determines the labor's share, but also its interaction with other expertises which makes one qualified to share part of the profit. This interaction provides better results than the same of individual skills. The application of the proposal not only increases output and hence the total revenue of a firm, but also helps keep the production cost at its lowest possible level. Furthermore, it leads one to look at a firm as an interacting body of different expertise. Increase in efficiency together with low production costs are to the mutual benefits of both the workers and the firm. Furthermore, there would not only be zero monitoring cost, but also eliminates shirking while increasing the effort of the workers to its maximum level.

Details

Humanomics, vol. 14 no. 4
Type: Research Article
ISSN: 0828-8666

To view the access options for this content please click here
Article
Publication date: 7 January 2020

Othmane Touri, Rida Ahroum and Boujemâa Achchab

The displaced commercial risk is one of the specific risks in the Islamic finance that creates a serious debate among practitioners and researchers about its management…

Abstract

Purpose

The displaced commercial risk is one of the specific risks in the Islamic finance that creates a serious debate among practitioners and researchers about its management. The purpose of this paper is to assess a new approach to manage this risk using machine learning algorithms.

Design/methodology/approach

To attempt this purpose, the authors use several machine learning algorithms applied to a set of financial data related to banks from different regions and consider the deposit variation intensity as an indicator.

Findings

Results show acceptable prediction accuracy. The model could be used to optimize the prudential reserves for banks and the incomes distributed to depositors.

Research limitations/implications

However, the model uses several variables as proxies since data are not available for some specific indicators, such as the profit equalization reserves and the investment risk reserves.

Originality/value

Previous studies have analyzed the origin and impact of DCR. To the best of authors’ knowledge, none of them has provided an ex ante management tool for this risk. Furthermore, the authors suggest the use of a new approach based on machine learning algorithms.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

To view the access options for this content please click here
Article
Publication date: 10 November 2014

Gabriel Caldas Montes and Gabriel Gonçalves do Vale Monteiro

The purpose of this paper is to analyze the influence of prudential regulation and monetary policies on the supply of credit as well as the influence of such policies on…

Abstract

Purpose

The purpose of this paper is to analyze the influence of prudential regulation and monetary policies on the supply of credit as well as the influence of such policies on the aggregate investment through the credit channel in Brazil.

Design/methodology/approach

The empirical analysis is based on estimates through ordinary least squares (OLS), generalized method of moments (GMM), system of equations through GMM (system-GMM), and impulse response functions through vector autoregressive (VAR).

Findings

The results suggest that monetary policies and prudential regulation affect aggregate investment through the bank lending channel. With regards to elasticities, the findings indicate that the credit is very sensitive to variations in economic activity and, in turn, prudential regulation presents a stronger influence on credit than the basic interest rate and the reserve requirement rate. Moreover, the estimates suggest that aggregate investment is more sensitive to entrepreneurs’ expectations and credit supply.

Practical implications

Aiming to reduce systemic risk in the economy, capital requirements may be increased in order to induce banks to a lower risk exposure by reducing the supply of loans. However, while this instrument strengthens the banking system, it can also lead the banking system to become less sensitive to monetary policy shocks, and also discourage aggregate demand through the influence that the credit exerts on investments. As a consequence, prudential regulation is an important tool because it acts on the balance between economic growth and low risk exposure of banks.

Originality/value

The paper provides useful insights to academicians, economists and policymakers who are interested in understanding the effects of monetary policies and prudential regulation on aggregate investment through the credit channel in an emerging economy under inflation targeting. Moreover, the paper develops a theoretical model in order to show the influence of different monetary policies, as well as the influence of prudential regulation on the supply of credit.

Details

Journal of Economic Studies, vol. 41 no. 6
Type: Research Article
ISSN: 0144-3585

Keywords

To view the access options for this content please click here
Article
Publication date: 10 July 2017

Larry D. Wall

This paper aims to highlight some of the more important changes in US prudential regulation and their implications for the operation of large foreign banking organizations…

Abstract

Purpose

This paper aims to highlight some of the more important changes in US prudential regulation and their implications for the operation of large foreign banking organizations (FBOs) in the USA.

Design/methodology/approach

This paper begins with a summary of the regulatory status of FBOs prior to the crisis. It then discusses developments during the US financial crisis of 2007-2009 that motivated stricter US prudential regulation. The third part discusses some major post-crisis changes in prudential regulation. Finally, the paper considers two areas where important changes in US rules could not be applied in a straightforward manner to FBOs: non-bank financial subsidiaries and branches and agencies.

Findings

Most of the regulatory changes will enhance US financial stability, albeit in some cases at the cost of weakening FBOs consolidated risk management. However, a few of the regulatory changes have given foreign branches and agencies a significant competitive advantage in US money markets.

Originality/value

The paper provides an integrated analysis of both the why and the what of changes in US regulation with some discussion of the economic consequences.

Details

Journal of Financial Regulation and Compliance, vol. 25 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

To view the access options for this content please click here
Article
Publication date: 15 January 2018

Peterson K. Ozili

The purpose of this paper is to investigate the non-discretionary determinants of bank loan loss provisions in Africa after controlling for macroeconomic fluctuation…

Abstract

Purpose

The purpose of this paper is to investigate the non-discretionary determinants of bank loan loss provisions in Africa after controlling for macroeconomic fluctuation, financial development and investor protection.

Design/methodology/approach

The author uses static and dynamic regression estimation to test for the determinants of bank loan loss provisions.

Findings

The author finds that non-performing loans (NPL), loan-to-asset ratio and loan growth are significant non-discretionary drivers of bank provisions in the African region. The author observes that bank provision is a positive function of NPL up to a threshold beyond which bank provisions will no longer increase as NPL increases. Also, bank loan-to-asset ratio is a significant driver of bank provisions when African banks have higher loan-to-asset ratios. The author finds that larger banks in financially developed African countries have fewer loan loss provisions while increase in bank lending leads to fewer bank provisions in countries with strong investor protection. Finally, higher bank lending is associated with higher bank provisions during economic boom.

Originality/value

This study is the first to assess the determinants of non-discretionary bank provisions in Africa as part of micro-prudential surveillance of banks in the African region.

Details

International Journal of Emerging Markets, vol. 13 no. 1
Type: Research Article
ISSN: 1746-8809

Keywords

To view the access options for this content please click here
Article
Publication date: 1 January 2006

Fred Robins

This paper aims to offer an Australian perspective on the recent crisis of confidence in corporate governance and its legislative and regulatory aftermath. It is

Abstract

Purpose

This paper aims to offer an Australian perspective on the recent crisis of confidence in corporate governance and its legislative and regulatory aftermath. It is informative because Australia's experience is directly comparable with that of the USA but its professional and regulatory traditions are much less prescriptive.

Design/methodology/approach

The author dissects the corporate scandal of recent years and analyses the several issues which have arisen. Problem elements, once identified, are evaluated separately, followed by an examination of the responses in each country. The main value of the paper lies in the separation and categorisation of these issues. For clarity, the author groups them as technical, political and cultural and uses these three labels to distinguish between problems which are the responsibility of the accounting profession, the responsibility of regulatory agencies, and those faced by managers individually. There is brief mention of some other groups, like suppliers of professional business services, who have also fallen under critical scrutiny. At the same time, other groups associated with contemporary financial scandal are omitted for lack of space.

Findings

The paper includes some observed contrasts between the consequences of scandal in the two jurisdictions and ends with a number of personal judgements.

Originality/value

It is hoped that the judgements made in this paper may offer food for thought and some guidance for those seeking to advance best practice in this important but delicate area.

Details

Corporate Governance: The international journal of business in society, vol. 6 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

To view the access options for this content please click here
Article
Publication date: 9 November 2015

Larry D Wall

The purpose of this paper is to develop an explicitly macroprudential supervisory framework designed to identify threats to financial stability use existing mechanisms to…

Abstract

Purpose

The purpose of this paper is to develop an explicitly macroprudential supervisory framework designed to identify threats to financial stability use existing mechanisms to reduce the risk of these threats and to provide information to the authorities to more efficiently mitigate any instability that does arise.

Design/methodology/approach

This paper begins with an analysis of the limitations of microprudential regulation. It then develops a macroprudential surveillance framework focused on those financial markets that have the potential to undermine financial stability. It concludes with a discussion of how the surveillance results may be used to enhance financial stability.

Findings

The current supervisory focus on microprudential supervision of systemically important institutions is insufficient; an explicitly macroprudential focus is required.

Research limitations/implications

Although this paper’s conceptual framework is applicable to all advanced financial systems the discussion of specific regulatory structures focuses on the USA.

Practical implications

An explicit supervisory focus on the threats posed by major financial markets is feasible and desirable.

Social implications

The probability of a financial crisis and the economic damage caused by a crisis can be significantly reduced by redirecting some regulatory efforts toward in-depth analysis of major financial markets.

Originality/value

The paper emphasizes that macroprudential supervision must include both quantitative and detailed analysis of the qualitative aspects of key markets.

Details

Journal of Financial Regulation and Compliance, vol. 23 no. 4
Type: Research Article
ISSN: 1358-1988

Keywords

To view the access options for this content please click here
Article
Publication date: 13 November 2009

Robert S. Clarkson

The purpose of this paper is to investigate the underlying causes of the series of banking disasters that unfolded from July 2007 onwards and to suggest what action should…

Abstract

Purpose

The purpose of this paper is to investigate the underlying causes of the series of banking disasters that unfolded from July 2007 onwards and to suggest what action should be taken to avoid a repetition.

Design/methodology/approach

The practices and culture that have evolved in banking over recent decades are compared and contrasted with general principles of actuarial science and with Adam Smith's blueprint for a well‐functioning market economy as set out in his Wealth of Nations. Recent instances of financial turmoil such as the Northern Rock debacle and the global “credit crunch” are then viewed from a longer term perspective.

Findings

The serious weaknesses identified by comparisons with actuarial science and the wisdom of Adam Smith, amplified by perverse methodologies of finance theory and “fair value” accounting and unchecked by the lax regulatory framework, take not only the global banking industry, but also the entire global economy to the point where the self‐stabilising properties of Western capitalism are destroyed. To avoid a repetition, banking practices and culture must be completely rebuilt along actuarial and “Adam Smith” lines, the destabilising methodologies of finance theory and “fair value” accounting must be abandoned, and the new and more prudent approach must be rigorously enforced by a strong regulatory regime.

Originality/value

By adopting a longer term actuarial perspective, the paper identifies deeper problems and suggests more fundamental solutions than have generally been the case in the continuing debate as to the best way forward in rebuilding a robust financial system.

Details

Journal of Financial Regulation and Compliance, vol. 17 no. 4
Type: Research Article
ISSN: 1358-1988

Keywords

To view the access options for this content please click here
Book part
Publication date: 26 August 2019

Mohd Yazid bin Zul Kepli and Sonny Zulhuda

This chapter attempts to clarify and describe the legal and regulatory framework for cryptocurrency with special focus on Malaysia and the threats that it poses from the…

Abstract

This chapter attempts to clarify and describe the legal and regulatory framework for cryptocurrency with special focus on Malaysia and the threats that it poses from the anti-money laundering perspective. Currently, very few countries have legislations that regulate cryptocurrency. Nonetheless, the crazy surge in prices (to more than 20-folds at some point) has sent both legitimate investors and criminals flocking to cryptocurrencies. This chapter analyses and compares the official reports from various governments, writings of government officials, experts and scholars in journals and newspapers, interviews and draws conclusions on the legal framework of cryptocurrency, and money laundering challenges. The study notes that the decision of the US regulators in allowing Bitcoin futures to trade on major exchanges to be one of the reasons behind the sudden surge. The study also finds that the South Korean regulators’ approach in banning its financial institutions from dealing with virtual currency is a positive one. The chapter stresses that it is not adequate for regulators to warn the public to act with extreme caution and increase their understanding on the risks they take on if they choose to invest in cryptocurrencies. Instead, it is necessary to have comprehensive international and national laws and regulations for the control and management of cryptocurrencies. In addition, the anti-money laundering legal framework must be improved to cater to the new threats posed by cryptocurrency.

Details

Emerging Issues in Islamic Finance Law and Practice in Malaysia
Type: Book
ISBN: 978-1-78973-546-8

Keywords

1 – 10 of over 1000