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A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks

Nader Virk Orcid Logo, Tasawar Nawaz, Philip Molyneux

Journal of International Financial Markets, Institutions and Money, Volume: 78, Start page: 101559

Swansea University Author: Nader Virk Orcid Logo

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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 p...

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Published in: Journal of International Financial Markets, Institutions and Money
ISSN: 1042-4431
Published: Elsevier BV 2022
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URI: https://cronfa.swan.ac.uk/Record/cronfa59807
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first_indexed 2022-04-12T15:29:40Z
last_indexed 2022-05-07T03:33:44Z
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spelling 2022-05-06T16:16:13.2999494 v2 59807 2022-04-12 A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks 26403610d08295bd38e7947e39c457b9 0000-0001-6338-2198 Nader Virk Nader Virk true false 2022-04-12 BAF 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. Journal Article Journal of International Financial Markets, Institutions and Money 78 101559 Elsevier BV 1042-4431 Islamic banking; Shariah governance; Entrenchment; Conflict of interest 1 5 2022 2022-05-01 10.1016/j.intfin.2022.101559 COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University 2022-05-06T16:16:13.2999494 2022-04-12T16:24:25.7018267 School of Management School of Management Nader Virk 0000-0001-6338-2198 1 Tasawar Nawaz 2 Philip Molyneux 3 59807__24018__6cd3e375e0064b7b853dbf3683110712.pdf 59807.pdf 2022-05-06T16:14:23.3501545 Output 506070 application/pdf Version of Record true © 2022 The Authors. This is an open access article under the CC BY license true eng http://creativecommons.org/licenses/by/4.0/
title A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks
spellingShingle A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks
Nader Virk
title_short A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks
title_full A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks
title_fullStr A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks
title_full_unstemmed A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks
title_sort A canary in a Coalmine! religious agency and its impact on the performance of Islamic banks
author_id_str_mv 26403610d08295bd38e7947e39c457b9
author_id_fullname_str_mv 26403610d08295bd38e7947e39c457b9_***_Nader Virk
author Nader Virk
author2 Nader Virk
Tasawar Nawaz
Philip Molyneux
format Journal article
container_title Journal of International Financial Markets, Institutions and Money
container_volume 78
container_start_page 101559
publishDate 2022
institution Swansea University
issn 1042-4431
doi_str_mv 10.1016/j.intfin.2022.101559
publisher Elsevier BV
college_str School of Management
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hierarchy_top_title School of Management
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hierarchy_parent_title School of Management
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description 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.
published_date 2022-05-01T04:17:14Z
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