Impact of bank regulation on risk of Islamic and conventional banks

We analyse the impact of bank regulation on risks Islamic banks (IBs) and conventional (CBs) between 2004 2015 by employing 455 CBs 95 IBs from 22 countries where coexist. Since objective Basel regulations is to achieve a stable banking sector mitigating risks, we examine various using regression framework. solvency risk, credit idiosyncratic risk systemic capital oversight, restriction activities, private monitoring supervisory power data provided World Bank. The findings show that though were originally developed for CBs, our results imply they are effective as well CBs. However, study also shows affect differently their business models different. More targeted towards would be necessary support IBs. Additionally, in regions with higher economic freedom indexes, can mitigate greater extent. Our combination free policies supervision addresses effectively. Finally, did not appear able control sample during 2007–2009 crisis. Hence, committee needs rethink about crisis times.