Cooperative and Islamic Banks: What can they Learn from Each Other?

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Islamic and cooperative banks such as credit unions are broadly similar in that they both share some risk with savers. However, risk sharing goes along with ownership control in cooperatives, whilst Islamic banks share risk with borrowers and 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, using mechanisms embedded in Islamic financial products, may strengthen cooperatives’ financial resilience.

Cooperative and Islamic Banks: What can they Learn from Each Other?  -  English (en)

Document Information

Document Type Report
Author Saeed Al-Muharrami ; Daniel C. Hardy
Year of Publication 2013
Publisher IMF
Number of Pages 31 pp.
Region / Country Global /
Primary Language English (en)
Keywords
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