Journal article 931 views 100 downloads
A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks
,
Tasawar Nawaz,
Philip Molyneux
Journal of International Financial Markets, Institutions and Money, Volume: 78, Start page: 101559
Swansea University Author:
Nader Virk
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DOI (Published version): 10.1016/j.intfin.2022.101559
Abstract
We examine the impact of religious agency on the performance of GCC Islamic banks. Our results show that a high proportion of prominent religious scholars on Shariah supervisory boards (SSB) improves financial performance. However, when a prominent Shariah scholar chairs the SSB there are negative p...
| Published in: | Journal of International Financial Markets, Institutions and Money |
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| ISSN: | 1042-4431 |
| Published: |
Elsevier BV
2022
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| Online Access: |
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| URI: | https://cronfa.swan.ac.uk/Record/cronfa59807 |
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| Abstract: |
We examine the impact of religious agency on the performance of GCC Islamic banks. Our results show that a high proportion of prominent religious scholars on Shariah supervisory boards (SSB) improves financial performance. However, when a prominent Shariah scholar chairs the SSB there are negative performance effects. With the high concentration of a few Shariah scholars, our findings have twofold implications: first, future research should develop approaches to test Shariah governance effectiveness in relation to the assigned mandate of SSBs; second, there is a need for revisiting Shariah compliance mechanisms to mitigate the embeddedness of Shariah scholars and their influence on Islamic bank performance. |
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| Keywords: |
Islamic banking; Shariah governance; Entrenchment; Conflict of interest |
| College: |
Faculty of Humanities and Social Sciences |
| Start Page: |
101559 |