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This chapter investigates the presence of a difference in the systemic risk level between Islamic and conventional banks in Bangladesh. The authors compare systemic resilience of three types of banks: fully fledged Islamic banks, purely conventional banks (CB), and CB with Islamic windows. The authors use the market-based systemic risk measures of marginal expected shortfall and systemic risk to identify which type is more vulnerable to a systemic event. The authors also use ΔCoVaR to identify which type contributes more to a systemic event. Using a sample of observations on 27 publicly traded banks operating over the 2005–2014 period, the authors find that CB is the least resilient sector to a systemic event, and is the one that has the highest contribution to systemic risk during crisis times.

Bangladesh has a long history of dealing with seasonal changes resulting in droughts and floods. Three major rivers, the Ganges, Brahmaputra and Meghna (GBM) come to a confluence, forming the GBM floodplain. There is a specific time window (June to September) when most of the runoff occurs and over 90% of their combined flow is discharged into the Bay of Bengal. As a result, the seasonal monsoons result in wet and dry seasons, making Bangladesh vulnerable to both floods and droughts. Climate change will likely alter characteristics such as timing and intensity, therefore increasing the challenge of adaptation. Socioeconomic conditions and high-population density limit the country's ability to adapt to these hydro-meteorological extremes. Although climatic variability causes severe damage and loss of life in Bangladesh, examples of local adaptation to the annual rhythm of seasonal variation can be found in flood-prone areas. Scientific modeling has resulted in more robust and efficient early warning systems that have greatly decreased the loss of life from climate hazards in recent years. However, positive impacts from models are limited by complex social concerns that are pervasive across the country.