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Article
Publication date: 3 December 2024

Abdulrazak Alenazi, Abdelaziz Chazi, Eid M Alotaibi and Kimberly Gleason

The purpose of this paper is to extend the current research to create a conceptual framework for the Islamic perspective on money-laundering (ML) activities.

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Abstract

Purpose

The purpose of this paper is to extend the current research to create a conceptual framework for the Islamic perspective on money-laundering (ML) activities.

Design/methodology/approach

The authors use a qualitative research approach through an analysis of texts from the Holy Quran, the traditions of the Prophet Muhammad (PBUH) and Islamic scholars’ jurisprudence, as well as a literature review of the research regarding money laundering within the scope of Sharia law.

Findings

The authors document three examples of “grey areas” remaining for consideration within the context of anti-money laundering (AML) policy at Islamic banks and Islamic insurance companies: the proceeds of the secular predicate crimes of tax evasion, grey and black-market employment and inheritance issues.

Research limitations/implications

The authors open new avenues for future research to examine the ML and other financial crimes by comparing different legal jurisdictions to Sharia laws, i.e. country-by-country analysis. Future research can also further grain the Sharia perspective of ML and other financial processes by examining the detailed views of different Islamic schools of thought (i.e. Hanafi, Maliki, Shafi’i and Hanbali) or by considering additional ML typologies in light of Sharia law.

Practical implications

The results are of interest for policymakers, whereas by acknowledging the differences between Sharia and civil laws and their complementarity, more accurate regulations can be set to establish prudent operational AML/CTF frameworks for Islamic banks and insurance companies.

Social implications

For the Sharia advisory boards of Islamic financial and designated non-financial businesses and professions to enhance their monitory role as an additional layer of AML control.

Originality/value

To the best of the authors’ knowledge, this paper is the first to provide consideration to the distinction between the concepts of secular illegality and Sharia prohibition in determining the permissible scope of activities to which Know Your Customer compliance should apply at Islamic banks and insurance companies.

Details

Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

Keywords

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Article
Publication date: 20 August 2024

Abdelaziz Chazi, Ali Mirzaei and Zaher Zantout

Proponents of Islamic banking believe that this banking model is relatively superior in times of financial crises. This study aims to examine whether Islamic banks were more…

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Abstract

Purpose

Proponents of Islamic banking believe that this banking model is relatively superior in times of financial crises. This study aims to examine whether Islamic banks were more resilient to the coronavirus 2019 (COVID-19) pandemic than their conventional peers, especially in terms of two of the most important banking risks, capital and liquidity risks.

Design/methodology/approach

The authors use a regression model to examine whether Islamic banks were more resilient to the recent health crisis, as compared to their conventional counterparts. The results are robust to alternative crisis time periods, the use of different model specifications and the inclusion of different control variables.

Findings

Unlike during the 2007–2008 global financial crisis (GFC), Islamic banks have not performed relatively well during the more recent crisis caused by the COVID-19 pandemic. The results show that Islamic banks experienced an increase in both capital and liquidity risks. The results also indicate a decrease in bank profitability, improved solvency and asset quality and a decrease in operational risk.

Originality/value

This study contributes to the literature on banking business model and resilience to economic crises. Contrary to some expectations and to their performance during the GFC of 2007–2008, Islamic banks were found to be more vulnerable during the COVID-19 pandemic than conventional banks.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 17 no. 5
Type: Research Article
ISSN: 1753-8394

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Article
Publication date: 6 November 2018

Abdelaziz Chazi, Alexandra Theodossiou and Zaher Zantout

The purpose of this paper is to develop and validate new robust measures of investors’ preference for the form of regular corporate payout. Then, the paper adds to the empirical…

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Abstract

Purpose

The purpose of this paper is to develop and validate new robust measures of investors’ preference for the form of regular corporate payout. Then, the paper adds to the empirical evidence on catering theory by examining managers’ catering to such preference.

Design/methodology/approach

The authors use the matching method to control for firm characteristics. The authors apply two robustness tests to validate the measures. The authors use the rigorous multivariate analysis.

Findings

US investors’ preference for regular dividends vs regular stock repurchases, being different forms of corporate payout, varies over time. Managers cater to investors’ preference for payout form. The findings are consistent with the catering theory of Baker and Wurgler (2004a). The number of firms that pay cash dividends regularly continue to outnumber the ones that purchase their shares regularly.

Research limitations/implications

The study only uses US data. It does not cover other countries.

Practical implications

The measures can be used in several future research endeavors, such as examining investors’ payout-form preferences in other countries (see Booth and Zhou, 2017) and exploring their determinants, the corporate governance characteristics of firms that cater to investors’ preference vs firms that do not, etc.

Social implications

The study contributes to understanding investors’ preferences and corporate payout behavior which is prerequisite to efficient policy formulation.

Originality/value

The proxies for investors’ payout-form preference control for firm characteristics and are unrelated to investors’ time-varying risk preferences. Also, they are robust to measurement issues. Moreover, the study covers a period of 40 years.

Details

Managerial Finance, vol. 44 no. 12
Type: Research Article
ISSN: 0307-4358

Keywords

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Article
Publication date: 9 March 2010

Abdelaziz Chazi, Paulo Renato Soares Terra and Fernando Caputo Zanella

The purpose of this paper is to survey financial managers in the Arab Gulf region about a broad set of financial decisions and contrast their answers with both prescriptions of…

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Abstract

Purpose

The purpose of this paper is to survey financial managers in the Arab Gulf region about a broad set of financial decisions and contrast their answers with both prescriptions of financial theory and practices of their North American and European peers.

Design/methodology/approach

The paper uses Graham and Harvey's questionnaire on the cost of capital, capital budgeting and capital structure that is also employed by Brounen et al. in Europe, containing two additional questions on corporate governance. Moreover, the survey included an additional question about Islamic financial instruments.

Findings

Despite each firm's unique characteristics and institutions, chief financial officers (CFOs) in the Middle East are acting in a manner similar to their North American and European counterparts.

Originality/value

All CFOs surveyed are located in countries that abide by a combination of Islamic, civil (French, Romano‐Germanic), and common (Anglo‐Saxon) laws. To the best of the authors' knowledge, this is the first time that a nearly identical corporate finance survey has been simultaneously administered in North America, Europe and the Arab Gulf region.

Details

European Business Review, vol. 22 no. 2
Type: Research Article
ISSN: 0955-534X

Keywords

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Article
Publication date: 23 November 2010

Abdelaziz Chazi and Lateef A.M. Syed

The purpose of this paper is to examine the way Islamic financial institutions dealt with the recent financial problems in terms of risk management.

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Abstract

Purpose

The purpose of this paper is to examine the way Islamic financial institutions dealt with the recent financial problems in terms of risk management.

Design/methodology/approach

In total, 27 Islamic banks and the same number of conventional banks selected from a wide range of countries around the world were analyzed. The capital ratios, based on the Basel Committee, are the primary tools used to analyze the riskiness of the Islamic and conventional banks. The focus on capital ratios is relevant in light of changes in banks' balance sheets due to significant write offs that caused a huge credit crunch in the western world. Capital ratios are considered as a reliable source in predicting potential bankruptcies.

Findings

The paper shows that Islamic banks are maintaining better capital ratios than to their conventional counterparts.

Originality/value

The paper presents a new approach to the comparative performance of Islamic and conventional banks in terms of risk management. The research design as well as the findings can be very useful to academicians and banking professionals alike.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 3 no. 4
Type: Research Article
ISSN: 1753-8394

Keywords

Available. Content available
Article
Publication date: 9 March 2010

Roland K. Yeo and Goran Svensson

912

Abstract

Details

European Business Review, vol. 22 no. 2
Type: Research Article
ISSN: 0955-534X

Keywords

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