Regulating Islamic banks in authoritarian settings: Malaysia and the United Arab Emirates in comparative perspective

Abstract

Until recently, most empirical support for theories on regulatory governance has been derived from democratizing and democratic settings. The assumption behind the selection of these cases relies on an understanding that non‐democratic systems will not nurture independent and autonomous regulatory practices. This paper closely examines this claim by problematizing variations in the regulation of the Islamic banking and finance industry based on recent findings from Malaysia and the United Arab Emirates. Combining historical data with field interviews, the findings reveal that historical legacies and regime institutions that frame political competition play a more nuanced role in the contemporary governance of market exchanges in non‐democratic settings. In particular, the type of political competition in authoritarian regimes influences the resulting configuration of regulatory institutions that govern Islamic banking and finance, which accommodate varying degrees of autonomy.

The holding behavior of Shariah financial assets within the global Islamic financial sector: A macroeconomic and firm-based model

“…SHA. A possible interpretation of this finding is that larger boards result in greater monitoring in relation to adherence to the religio-financial framework of Islamic finance, thus inducing managers to hold a higher proportion of Shariah assets (Apaydin, 2018;Halim et al, 2019). Furthermore, the suggestion from our results that the size of the Shariah supervisory board is a positive linear predictor of the change in the ratio of Shariah assets to total assets, i.e.…”

“…Once again, we have, a priori, no explanation for this but afford an elucidation. A possible interpretation is that, given that Shariah-based screening processes are religiously stricter than Shariah-compliant screening process, Shariah-based instruments would be Shariah-compliant by default resulting in a wider and deeper market in terms of instruments and clientele for Shariah-compliant firms (Apaydin, 2018). Moreover, given the relative leniency of the Shariah-compliant screening processes against the Shariah-based, there is greater room for financial innovation, once again manifesting a more liquid market.…”

Islamic Regulations and Islamic Banks Margins: an Empirical Investigation Into Asean Countries

“…This suggests that Islamic banks do indeed require a specific set of regulations. The existing Islamic bank regulatory framework differs significantly by country in terms of the structure and content of the regulations governing the operations of the banking system (Apaydin, 2018;Alsartawi, 2019). For example, Malaysian and Indonesian Islamic banks adopt a regulatory framework for both Islamic and conventional banks, but with separate guidelines for Islamic ones (Song and Oosthuizen, 2014).…”

Varieties of consumer credit data regimes: A regulatory governance approach

“…Though we are committed to cross-national comparisons in general, comparative capitalism in particular (see also Apaydin, 2018;Križi c, 2019;Mathieu & Rangoni, 2019), we would also like to know which subregime or sector is more or less likely to accord us a better understanding of national varieties of regulation. Our empirical findings demonstrate that variance at the national level can and should be complemented with analysis of variations among subregimes and diverse regulatory strategies.…”