Risk Management: Comparative Study Between Islamic Banks and Conventional Banks

Abstract

In the future the role of Islamic Banking/Sharia should be developed as an alternative source of corporate financing in addition to conventional bank financing. The role of this institution is increasing because based on survey Islamic Development Bank for certain types of risks attached to Islamic Bank is relatively easier to manage it compared with conventional banks. Easier risk management results in lower financing risks, making it easy to compete because it is profitable for banks, corporations and the economy. The survey results show that in Islamic Bank: Capital is quite good, Capital and Liquidity risk is low. Credit, market and operating risk moderate. More concerned about credit and liquidity risk. The most commonly used risk management techniques are Credit rating.

Keywords: Risk Management, Islamic Bank, Conventional Bank