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This paper aims to reviews Sukuk risk classification schemes based on extending and adapting the risk classification schemes of conventional finance. It is then argued that risk classification schemes based on Sukuk structure provide significant insights into Sukuk risk not obtainable from conventional schemes. This is because Sukuk structure risk classification schemes link Sukuk risk more directly to the fundamental causal factors creating those risks. These links are less evident in conventional risk classification schemes. It is hypothesised that Sukuk structure risk factors will prove to be highly significant in multifactor expected return regressions.

The paper argues that, given the paucity of the empirical data currently available to researchers in Islamic finance, greater care needs to be taken in hypothesis development than is necessary for conventional finance. The limited data available should be used for testing hypotheses and not “wasted” in hypothesis formation. Through a meta-analysis of the existing literature on Sukuk risk, it is hypothesised that Sukuk structure risks will be highly significant in explaining Sukuk returns and returns volatilities in empirical tests.

The main Sukuk structures, debt based, equity based, assets based, agency based and hybrid structures, arise directly from the requirement of Sukuk to conform to the Shariah and to the fundamental ethical principles of Islamic finance and business. Further, Sukuk risk profiles are directly related to Sukuk structures. Thus, Sukuk structure risks are essentially Shariah risks. The paper presents a Sukuk risk classification matrix based on an evaluation of Sukuk structure risks.

The findings on the relation of Sukuk risks to Sukuk structures require corroboration by rigorous empirical tests.

The paper contributes to work on the creation of evidence-based risk management techniques in Islamic finance and to the expansion of ethical financial management.

The paper is one of the early detailed academic studies on the evaluation of risks arising from Sukuk structures.

This paper aims to examine the effect of the concentration of ownership concentration and the deposits structure on the link between income structure and insolvency risk in Islamic banks operating in Gulf Cooperation Council (GCC) countries.

Using data for 43 GCC Islamic banks over the period from 2005 to 2012, this paper specifies a three-stage least-squares model in which the impact of the concentration of ownership concentration and the deposits structure on income diversification and insolvency risk is jointly analyzed to address the problem of endogeneity.

The findings show that the income structure influences the insolvency risk in Islamic banks with a concentrated ownership structure. This is because the deposits structure and large shareholders influence strategic decisions.

This paper is, also, subject to a number of limitations. First, this study focuses exclusively on the GCC context and excludes the other Middle East and Far East countries. Second, the paper does not take into consideration banking regulation.

The paper findings shed light on the ongoing debate about the benefits of revenue diversification and also provide valuable insights for market participants, regulators and supervisors about what drives performance in Islamic banks.

The paper fills the gap in the existing literature on insolvency risk in Islamic banks. It is expected to provide useful information for policy makers and Islamic bankers to develop a sound Islamic banking industry in the GCC region. In addition, the link identified between ownership concentration, deposits structure and revenue diversification is a novel way of analyzing the impact of the latter on insolvency risk in Islamic banks.

Risk identification often produces nothing more than a long list of risks, which can be hard to understand or manage. The list can be prioritised to determine which risks should be addressed first, but this does not provide any insight into the structure of risk on the project. Traditional qualitative assessment cannot indicate those areas of the project which require special attention, or expose recurring themes, concentrations of risk, or ‘hot‐spots’ of risk exposure. The best way to deal with a large amount of data is to structure the information to aid comprehension. For risk management, this can be achieved with a Risk Breakdown Structure )RBS) a hierarchical structuring of risks on the project. The RBS can assist in understanding the distribution of risk on a project or across a business, aiding effective risk management. Just as the Work Breakdown Structure (WBS) is an important tool for projects because it scopes and defines the work, so the RBS can be an invaluable aid in understanding risk. The WBS forms the basis for many aspects of the project management process; similarly, the RBS can be used to structure and guide the risk management process. This paper presents the concept of the RBS, and gives a number of examples drawn from different project types and industries. Although not necessarily based in FM, the concepts and experience can be applied to any project. The benefits of using the RBS are then outlined, including as an aid for risk identification or risk assessment, comparison of projects, providing a framework for cross‐project risk reporting, and structuring lessons to be learned for future projects. This paper shows how to use the RBS to gain these benefits.

The purpose of this paper is to compare the structure of risk and the structure of pricing in housing markets where the interaction between segments is taken into account with the structures that come about in a housing market approach that ignores this interplay. Knowing how most empirical assessments of whether housing markets are in or out of equilibrium is related to macroeconomic variables and is ignoring the interplay between segments our aim is to highlight the extent to which a homogeneous market framework underestimates pricing and risk in real housing markets.

Framed in terms of a linearized housing market with two segments, the author derives expressions for house prices and house price risk in three scenarios. The author compares the structure of pricing and the structure of risk in a homogeneous housing market with those of two distinct heterogeneous housing markets where segments are linked as well analyzing as how prices and risk responds to shocks.

The author derives expressions for market segment prices and for the house price index in three distinct housing market scenarios and shows how heterogeneous housing market frameworks produce both expressions for house prices and for house price risk, as well as a response in both risk and prices to shocks to demand, that deviate from those of a homogeneous housing market framework. While significantly underestimating house price risk a homogeneous framework might also be taken by surprise of the price response accompanying shocks to demand.

The authors' simplistic expressions for house prices and house price risk provides a framework for bringing two distinct theoretical housing market camps onto the same playing field. The approach shows the value added of taking the interplay between market segments into account when analyzing housing market developments.

The purpose of this paper is to examine the extent to which corporate managers alter their capital structure in response to risk exposures on the Ghana Stock Exchange (GSE).

A panel data covering the period from 2002 to 2007 was employed under the framework of the seemingly unrelated regression approach.

The paper finds that the direction and magnitude of the impact of risk exposures depends on capital structure measurement variables; namely, financial leverage, debt ratio, or short‐term debt to equity. The paper also finds that corporate managers adjust their capital structure differently in response to different kinds of risk exposures namely business risk or financial risk. Specifically, operating risk, bankruptcy risk, and bankruptcy cost in addition to other firm level characteristics such as asset structure, firm size and profitability are found to be significant driving factors in shaping corporate financial policy on the GSE.

The main value of this paper is to analyze the relationship between risk exposures and corporate financial policy from a developing country perspective.

The solvency of insurance companies is closely related to the policyholders, and consequently regulators in Taiwan pay considerable attention to this area. Several studies have demonstrated a close correlation among capital structure, operational risk and profitability. This study seeks to provide evidence regarding the influence of capital structure and operational risk on profitability of the life insurance industry in Taiwan.

Structural equation modeling, which involves factor‐analysis and path‐analysis, is used to justify the relationship among capital structure, operational risk and profitability. Adding the macroeconomic latent variable to the model as a control variable demonstrates that the macroeconomic latent variable positively influences capital structure, operational risk and profitability.

The study leads to four key findings. First, according to the empirical result, the research model has excellent goodness‐of‐fit. That is to say, using multiple financial indices suitably measures the specific financial factors. Second, the capital structure exerts a negative and significant effect on operational risk. Third, there is no reciprocal relationship but a one‐way effect between capital structure and operational risk. Fourth, the operational risk exerts a negative and significant effect on profitability.

The empirical result shows the profitability decreased with the higher equity ratio. Hence, the regulatory organizations must urge insurance companies to effectively diversify their investments and employ risk avoidance strategies. Effective use of hedging and diversifying will help to divide risk and create financial revenue.

The study proposes that the government should loosen investment restrictions and develop other instruments to assist risk‐based capital in checking the financial condition of insurance companies.

The purpose of this paper is to explore the dynamic interdependence structure and risk spillover effect between the Chinese stock market and the US stock market.

This paper mainly uses the multivariate R-vine copula-complex network analysis and the multivariate R-vine copula-CoVaR model and selects stock price indices and their subsector indices as samples.

The empirical results indicate that the Energy, Materials and Financials sectors have leading roles in the interdependent structure of the Chinese and US stock markets, while the Utilities and Real Estate sectors have the least important positions. The comprehensive influence of the Chinese stock market is similar to that of the US stock market but with smaller differences in the influence of different sectors of the US stock market on the overall interdependent structure system. Over time, the interdependent structure of both stock markets changed; the sector status gradually equalized; the contribution of the same sector in different countries to the interdependent structure converged; and the degree of interaction between the two stock markets was positively correlated with the degree of market volatility.

This paper employs the methods of nonlinear cointegration and the R-vine copula function to explore the interactive relationship and risk spillover effect between the Chinese stock market and the US stock market. This paper proposes the R-vine copula-complex network analysis method to creatively construct the interdependent network structure of the two stock markets. This paper combines the generalized CoVaR method with the R-vine copula function, introduces the stock market decline and rise risk and further discusses the risk spillover effect between the two stock markets.

There is a widening gap between the expectations of internal audit stakeholders and the value the function brings to the table, for example, in the management of the risks threatening an organisation. The purpose of this paper is to investigate the views of chief audit executives (CAEs), the chairs of audit committees and senior management on the contribution of the internal audit functions to risk management in the South African public sector. This contribution is considered in the context of existing risk management structures and the level of coordination between these structures and internal auditing.

The views of heads of internal auditing, chairpersons of the audit committee and the Accounting Officer (similar to the CEO of private sector organisations) of national, provincial and local government organisations were obtained and statistically analysed.

The results indicate that the CAEs have noticeably different views from the other two parties, and that the existence of risk management structures has a minor effect on how the contribution of internal auditing to risk management is perceived.

It was decided to not include the views of heads of risk management functions owing to the immaturity of risk management in this sector with in the South African public sector.

The results of the study provide internal auditing with information on narrowing the possible gap between the perceptions of senior management and their own perceptions. Senior management could streamline the efforts of these two parties in mitigating the key risk of the organisation. The audit committee, as the independent overseer of internal auditing, will obtain information on whether internal auditing contributes to risk management, and if not, how to address these issues, taking into account the existence (or a lack thereof) of risk management structures. The legislator and regulator of public sector could be influenced to provide clearer guidance or rules in this regard in order to enhance the efficiency and effectiveness of risk management policies and practices.

Limited studies have been conducted regarding the coordination of internal auditing and risk management in mitigating the key risks; especially within the public sector domain whether the existence of risk management structures would affect this coordination. Also the views of senior management, as the key stakeholder of internal auditing, on this matter have not yet been solicited.

This study aims to show the relationship between competition, financial stability and ownership structure of banks in the Middle East and North African (MENA) countries.

This study uses the generalized method of moments (GMM) estimators to generate research results. This study uses an unbalanced panel dynamic data set. It covers the period 2011 to 2017 in MENA banks.

This study implies that there is a significant and positive relationship between market power and the financial stability of banks in MENA countries. It explains a competitive market focus on credit risk, which turns them risky. From the bank’s ownership view, Islamic banks are in a less risky position which means Islamic banks are more stable than other ownership structures. On the other hand, government specialized institute displays their poor financial stability and risky from other ownership structures. Unfortunately, there is no significant impact of ownership structure on competition unless Islamic banks prove that they (Islamic banks) perform better in market power.

The empirical findings of this study suggest that MENA banks should improve the process of managing and monitoring the non-performing loan (loan segment business). It reduces the level of credit risk, which leads to achieving more profit. It also recommends that loan quality should improve immediately in this region for declining financial disruption. Based on the ownership structure, policymakers and stakeholders should adjust their risk and financial stability. Notably, the stakeholders can focus on Islamic banks in this region as this type of ownership structure showing superiority over other ownership structures.

This study is based on the latest data set and produced outcomes by using a GMM estimator. It also uses multiple measures of competition and risk variables to get robust results. Moreover, to the best of the knowledge, this study is the pioneer to examine the competition, risk (financial stability) and ownership structure of banks in the MENA countries.

Corporate boards monitor managerial decisions as concluded by the monitoring hypothesis. In this scenario, the present study stresses that leverage decisions can be used as a tool to control insolvency risk.

This study aims at investigating the intervention of capital structure and debt maturity on the relationship between corporate board composition and insolvency risk by employing Preacher and Hayes’s (2008) approach. The study sample comprises 284 firms from 2013 to 2017. Structural equation modeling is used to study the direct and indirect relationships among study variables.

Results show that debt maturity is a significant mediator between CEO duality and insolvency risk and between board size and insolvency risk relationships. However, the capital structure did not mediate any of the proposed links.

This study suggests using more long-term debt to tackle insolvency risk in listed non-financial firms of Pakistan. It is also inferred that decisions regarding debt maturity are more crucial than capital structure decisions because insolvency risk is concerned.

This study evaluates the comparative mediating role of the debt maturity and the capital structure. Such role is uncommon in the literature addressing the relationship between governance variables and insolvency risk.