Cooperative and islamic banks: What can they learn from each other?

Saeed Al-Muharrami; Daniel C. Hardy

doi:10.1108/S0885-333920140000015011

Cooperative and islamic banks: What can they learn from each other?

Saeed Al-Muharrami, Daniel C. Hardy

Economics & Finance

Research output: Contribution to journal › Article

4 Citations (Scopus)

Abstract

Islamic and cooperative banks - including credit unions - are broadly similar in that they both share risk with savers. However, risk sharing goes along with ownership control in cooperatives, whilst Islamic banks share risk with borrowers also, and full downside risk with depositors. Islamic banking is consistent with mutual ownership, which may ease some of the governance and efficiency concerns implied by Shari'ah constraints. Greater risk sharing among cooperative bank stakeholders, along the lines of products offered by Islamic banks, may strengthen cooperatives' financial resilience.

Original language	English
Pages (from-to)	73-94
Number of pages	22
Journal	Advances in the Economic Analysis of Participatory and Labor-Managed Firms
Volume	15
DOIs	https://doi.org/10.1108/S0885-333920140000015011
Publication status	Published - 2014

Keywords

Cooperative banks
Credit unions
Islamic banks
Profit and loss sharing

ASJC Scopus subject areas

Industrial relations
Economics, Econometrics and Finance (miscellaneous)

Access to Document

10.1108/S0885-333920140000015011

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Al-Muharrami, S., & Hardy, D. C. (2014). Cooperative and islamic banks: What can they learn from each other? Advances in the Economic Analysis of Participatory and Labor-Managed Firms, 15, 73-94. https://doi.org/10.1108/S0885-333920140000015011

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