How Does Economic Uncertainty Affect the Financial Performance and Stability of Islamic and Conventional Banks in Hydrocarbon- Based Rentier Economies?
This study investigates whether Islamic banks are more resilient to uncertainties than their counterparts. Gulf Cooperation Council (GCC) countries are included in the sample, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE), which are heavily dependent on oil revenues and therefore affected by the current global and local crisis. Therefore, it would make sense to analyse hydrocarbon-based rentier economies which are directly affected by uncertainties and have a large amount of global Islamic finance assets. From this point of view, this chapter aims to analyse how rentier economies’ state fragility and governance indices impact the financial stability and performance of Islamic banks and conventional banks. In addition, this chapter argues that Islamic banks respond to uncertainties similarly to conventional banks.
Citation
Akkas, E., & Asutay, M. (2025). How Does Economic Uncertainty Affect the Financial Performance and Stability of Islamic and Conventional Banks in Hydrocarbon- Based Rentier Economies?. In E. Akkas (Ed.), Islamic Economics and Financial Crisis. Routledge. https://doi.org/10.4324/9781003500223-8
