Some specialists have argued that the Islamic banks were less affected by the financial crises because of their risk-sharing and asset-based nature as well as the fact that they do not deal with the kind of assets associated with most of the losses that non-Islamic banks suffer during financial crises. Still another section of experts argue that the Islamic Banks, just like the non-Islamic banks, have depended on leverage and have taken on considerable amounts of risks that expose them to the second phase impact of the global financial crises (Čihák & Hesse, 2008).
By and large, Islamic Banks suffered less risk compared to non-Islamic banks during the 2008 financial crisis, especially considering that the non-Islamic banks suffered the largest losses in Europe and the US. A close study on 2008 financial crises shows that Islamic Banks did better, in terms of profitability, than the non-Islamic banks. This situation, however, retracted in 2009 as the impact of the crises became more real. Islamic Banks from GCC continuously showed a growth in assets and credit that surpassed the non-Islamic banks in all countries, apart from UAE. ...Show more