Unconventional Banking System in Distress

Wassim Rajhi, Slim Ahmed Hassairi



With the proliferation of banking sector problems around the world, in the last few years the empirical literature on systemic banking crises has grown significantly. This literature has frequently focused attention on the factors connected with the onset of conventional banking distress, in order to identify the determinants of the crises or to look for “early warning indicators” of difficulty. In fact a number of studies have relied on factors determining bank failures related to conventional rather than Islamic information. A lack of study and comprehension therefore has been a major challenge. Regrettably Islamic banking still remains enigmatic. The central aim of this paper is to elucidate the sense of Islamic banking distress and expose collapse. This study contributes to this ongoing debate over the Banking Distress of Islamic bank with the following distinct features. First, we pay attention to size and the factors determining bank failures for the unconventional. Second, we try to identify some cases of banks facing these problems. As mentioned below banks face difficulties in the present-day environment, and Islamic banks are no exception. Given all these constraints, it would be necessary to adopt measures to ovoid collapse which will be treated in the last part.

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DOI: https://doi.org/10.5539/ijef.v3n4p70

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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)  Email: ijef@ccsenet.org

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