Shariah Governance Characteristics and Risk-Taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model
Purpose: In Malaysia, since the global financial crisis in 2007 and 2008, the low level of stability, excessive risk-taking and weak governance structure in the dual banking system has become essential for deliberation. The purpose of this research is to develop a conceptual model on the effect of...
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doaj-8cd5d874f2e74d5594502b4bcc4834342020-11-25T02:49:18ZengCSRC PublishingJournal of Accounting and Finance in Emerging Economies2519-03182518-84882020-06-016210.26710/jafee.v6i2.1094Shariah Governance Characteristics and Risk-Taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual ModelSalina Rasli0Aza Azlina Md Kassim1Abul Bashar Bhuiyan2PhD Scholar, Faculty of Business and Accountancy, University Selangor, Shah Alam, MalaysiaLecturer, Faculty of Business and Accountancy, University Selangor, Shah Alam, MalaysiaLecturer, Faculty of Business and Accountancy, University Selangor, Shah Alam, Malaysia Purpose: In Malaysia, since the global financial crisis in 2007 and 2008, the low level of stability, excessive risk-taking and weak governance structure in the dual banking system has become essential for deliberation. The purpose of this research is to develop a conceptual model on the effect of Shariah governance characteristics on risk-taking between local and foreign of Islamic banks in Malaysia. Design/Methodology/Approach: Based on prior review of indicators and findings, this research proposes a conceptual model of effective Shariah governance characteristics and its effect on risk-taking of Islamic banks. A self-develop of Shariah board index (SB-Index) based on SB size, education background, membership with IFSB and attendance in meeting. Insolvency risk, credit risk and liquidity risk are the proxy used for risk-taking measurement. The theory of stewardship and resource dependency theory are used as examples of the theories of corporate governance to support the conceptual framework suggested. Findings: The Islamic banks in Malaysia are assumed to have effective Shariah governance and there will be low impact on risk-taking. Implications/Originality/Value: The regulators of Islamic banks must prepare for the need to improve the current standards for corporate governance in Malaysia. https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/1094Shariah GovernanceShariah BoardRisk-TakingIslamic Banks |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Salina Rasli Aza Azlina Md Kassim Abul Bashar Bhuiyan |
spellingShingle |
Salina Rasli Aza Azlina Md Kassim Abul Bashar Bhuiyan Shariah Governance Characteristics and Risk-Taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model Journal of Accounting and Finance in Emerging Economies Shariah Governance Shariah Board Risk-Taking Islamic Banks |
author_facet |
Salina Rasli Aza Azlina Md Kassim Abul Bashar Bhuiyan |
author_sort |
Salina Rasli |
title |
Shariah Governance Characteristics and Risk-Taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model |
title_short |
Shariah Governance Characteristics and Risk-Taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model |
title_full |
Shariah Governance Characteristics and Risk-Taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model |
title_fullStr |
Shariah Governance Characteristics and Risk-Taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model |
title_full_unstemmed |
Shariah Governance Characteristics and Risk-Taking of Local and Foreign Islamic Banks in Malaysia: A Conceptual Model |
title_sort |
shariah governance characteristics and risk-taking of local and foreign islamic banks in malaysia: a conceptual model |
publisher |
CSRC Publishing |
series |
Journal of Accounting and Finance in Emerging Economies |
issn |
2519-0318 2518-8488 |
publishDate |
2020-06-01 |
description |
Purpose: In Malaysia, since the global financial crisis in 2007 and 2008, the low level of stability, excessive risk-taking and weak governance structure in the dual banking system has become essential for deliberation. The purpose of this research is to develop a conceptual model on the effect of Shariah governance characteristics on risk-taking between local and foreign of Islamic banks in Malaysia.
Design/Methodology/Approach: Based on prior review of indicators and findings, this research proposes a conceptual model of effective Shariah governance characteristics and its effect on risk-taking of Islamic banks. A self-develop of Shariah board index (SB-Index) based on SB size, education background, membership with IFSB and attendance in meeting. Insolvency risk, credit risk and liquidity risk are the proxy used for risk-taking measurement. The theory of stewardship and resource dependency theory are used as examples of the theories of corporate governance to support the conceptual framework suggested.
Findings: The Islamic banks in Malaysia are assumed to have effective Shariah governance and there will be low impact on risk-taking.
Implications/Originality/Value: The regulators of Islamic banks must prepare for the need to improve the current standards for corporate governance in Malaysia.
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topic |
Shariah Governance Shariah Board Risk-Taking Islamic Banks |
url |
https://publishing.globalcsrc.org/ojs/index.php/jafee/article/view/1094 |
work_keys_str_mv |
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