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Article Information:
Developing a Structural Model to Define Influential Risk Elements in Islamic Banking: An Empirical Study in Iran
Akbar Alem Tabriz, Fariba Riahi and Zahra Banasadegh
Corresponding Author: Fariba Riahi
Submitted: August 13, 2014
Accepted: October 17, 2014
Published: April 15, 2015 |
Abstract:
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The aim of this study is to identify the most influential risk elements and determine causal relationships network of risk factors in Islamic banking in Iran. Due to some unique principles used by Islamic banks, they encounter difficulties to manage various risks effectively than conventional banks. Consequently, a structural model was developed from a comprehensive set of risk elements with five reflective and one formative output construct namely; credit, liquidity, market, operational, unique risks and total risk by using PLs path modeling which statistically supports all constructs. Fitness Indices imply homogeneity among risk elements and statistics indicate not severe multicollinearity and redundancy in the model. This study provides key insight into causal relationships of influential risk elements in Islamic banking essential for proper resource allocation to compete with conventional banks.
Key words: Credit risks, Islamic banking, liquidity risks, market risks, operational risks, risk management,
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Cite this Reference:
Akbar Alem Tabriz, Fariba Riahi and Zahra Banasadegh, . Developing a Structural Model to Define Influential Risk Elements in Islamic Banking: An Empirical Study in Iran . Research Journal of Applied Sciences, Engineering and Technology, (11): 902-915.
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ISSN (Online): 2040-7467
ISSN (Print): 2040-7459 |
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