Model risk and the Covid–19. The reality in Islamic banking industry

Antova, Ilinka and Haron, Razali (2020) Model risk and the Covid–19. The reality in Islamic banking industry. In: The 6th Islamic Finance Conference (IFC 2020), 17th December 2020, Jeddah, Saudi Arabia. (Unpublished)

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Abstract

The COVID-19 pandemic has put severe strain on people and businesses worldwide. The pervasiveness of and speed with which COVID -19 is spreading has affected the global economy through disruptions to both domestic and international trade, travel, supply chains and production. The banking industry in particular has been facing volatile market conditions, deteriorating credit quality, unexpected liquidity constraints and uncertainties related to operational risk, among others. The combined effects of the shock from the COVID -19 pandemic and oil prices volatility, as well as the financial services industry’s vulnerability to factors such as global trade wars, economic sanctions and political blockades, will test the strength and resilience of the Islamic financial institutions in 2020. The impact of COVID-19 on liquidity position will be particularly challenging and more serious for Islamic banks, because they have more exposure to retail and small businesses, most of which have had to shut down and with the possibility that some may not return into business. Using document analysis approach, this study attempts to provide insight on how to model risk of Islamic banks following the Covid-19 pandemic.

Item Type:	Conference or Workshop Item (Invited Papers)
Additional Information:	4581/85919 Presented via online
Uncontrolled Keywords:	Risk model, Islamic banking, Covid-19, value-at-risk
Subjects:	H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Dr. Razali Haron
Date Deposited:	10 Dec 2020 11:12
Last Modified:	10 Dec 2020 11:12
URI:	http://irep.iium.edu.my/id/eprint/85919

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