D.B.A. Baker College (Michigan), 2016.
Specialization: Finance; Business administration; Management
Perceptions of financial personnel about conventional and Islamic banks during a financial crisis
150 pages. UMI #: 10164275
Citation, Abstract & Full text in ProQuest Dissertations & Theses Database
The most worrisome aspect of the global financial crisis of 2008 was the failure of major U.S. conventional banking and financial institutions that needed to be bailed out, while their Islamic counterparts performed well and needed little if any government intervention. The purpose of this multiple case study was to explore perceptions of employees of both bank types to determine differences to which each one’s performance during the crisis can be attributed. The theoretical framework for this study was the Macroprudential regulation of banking, which is aimed at mitigating risks to the financial system as a whole. Using purposive sampling, 19 participants from Islamic and conventional banks were selected and interviewed. The research questions focused on the structural characteristics of both bank models as well as unique features of Islamic banks, such as differences in culture, marketing and branding, and profit derivation. The results identified a gap in corporate governance that led to the reckless behavior of U.S. conventional banks and financial institutions. A growing belief by many Islamic scholars and banking practitioners that Islamic banks are ready to replace conventional banks was rejected by participants, who noted that Islamic banking has many structural limitations that affect its source and use of funds, unlike its conventional counterpart. The results are consistent with aspects of Dodd-Frank and Basel III, reform measures of the Macroprudential approach to banking regulation.