The role of disclosing banking risks in achieving financial stability for the banking sector (A comparative study between conventional and Islamic banks)

Document Type : Original Article

Authors

1 PhD Researcher - Faculty of Commerce - Sadat City University

2 Professor of Financial Accounting Faculty of Commerce al-manoufia University Egypt

3 Accounting Department - Faculty of Commerce - Sadat City University

Abstract

The research aimed to study and analyze the role of disclosure of credit and liquidity risks in conventional and Islamic banks in achieving financial stability in the banking sector, by applying to a sample of 11 conventional and Islamic banks listed on the Egyptian Stock Exchange, during the period 2015-2021. Conventional and Islamic banks with regard to the disclosure of credit risks, while there are no statistically significant differences between both traditional and Islamic banks with regard to the disclosure of liquidity risks, and the study also found statistically significant differences between both conventional and Islamic banks with regard to the level of financial stability, As well as the existence of a statistically significant effect of disclosing credit and liquidity risks to achieve financial stability, and the study recommended increasing and developing awareness among banks operating in the banking system of the importance of improving the practices of disclosing banking risks, especially credit and liquidity risks due to its significant impact on achieving financial stability, as well as formulating an indicator or a business model. By the central bank to measure the degree of financial stability of the banking sector so that the Banks may apply it and disclose it to each bank, to know the degree of financial stability for each bank, in a way that creates a kind of competitive spirit among banks towards improving their financial stability rates compared to others.

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