What's in it for Me? A Primer on Differences between Islamic and Conventional Finance in Malaysia

23 Pages Posted: 9 Aug 2012

See all articles by Olga Krasicka

Olga Krasicka

affiliation not provided to SSRN

Sylwia Barbara Nowak

International Monetary Fund (IMF)

Date Written: June 2012

Abstract

What attracts conventional investors to Islamic financial instruments? We answer this question by comparing Malaysian Islamic and conventional security prices and their response to macrofinancial factors. Our analysis suggests that Islamic and conventional bond and equity prices are driven by common factors. Likewise, especially in recent years, Islamic banks have responded to economic and financial shocks in the same way as conventional banks, suggesting that the gap between Islamic and conventional financial practices is shrinking.

Keywords: Islamic Banks, Conventional Banks, Sukuk, Malaysia, Banking Sector, Bonds, Commercial Banks, Financial Instruments, Islamic Banking

JEL Classification: E44, G15, G21

Suggested Citation

Krasicka, Olga and Nowak, Sylwia Barbara, What's in it for Me? A Primer on Differences between Islamic and Conventional Finance in Malaysia (June 2012). IMF Working Paper No. 12/151, Available at SSRN: https://ssrn.com/abstract=2127042

Olga Krasicka (Contact Author)

affiliation not provided to SSRN

No Address Available

Sylwia Barbara Nowak

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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