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Lowly or negative benchmark rates bandwagon: any risk implications for Islamic banks?

Chattha, Jamshaid Anwar and Syed Jaafar Alhabshi, Syed Musa (2018) Lowly or negative benchmark rates bandwagon: any risk implications for Islamic banks? Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah (Journal of Islamic Economics), 10 (1). pp. 115-134. ISSN 2087-135X E-ISSN 2407-8654

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To stimulate the economy, regulators across all jurisdictions have been taking unconventional approaches. Thus, in recent years, the management of benchmark rates (or interest rates) has received considerable prominence in the banking sector due to some reasons including supervision banks’ benchmark rates under Basel II. This paper reviews the possible dysfunctional implications of lowly and/or negative rates and provides a risk management and regulatory perspective for Islamic banks. These consequences call for a better risk management with appropriate tools and effective supervisory oversight. It hoped that the initial discussion presented in this paper on the implications and controls invites a broader debate on this issue in the Islamic financial services industry

Item Type: Article (Journal)
Additional Information: 6867/68302
Uncontrolled Keywords: negative rates, benchmark rates, Islamic banks, financial stability
Subjects: H Social Sciences > HG Finance > HG1501 Banking
H Social Sciences > HG Finance > HG4001 Financial management. Business finance. Corporation finance.
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr Syed Musa Alhabshi
Date Deposited: 06 Dec 2018 15:35
Last Modified: 06 Dec 2018 15:35
URI: http://irep.iium.edu.my/id/eprint/68302

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