02090cas a2200253 a 4500 AALejournalIMF015050 230101c9999 xx r poo 0 0eng d 5.00 USD 9781484380628 1018-5941 BD-DhAAL BD-DhAAL Farooq, Moazzam. Are Islamic Banks More Resilient during Financial Panics? / Moazzam Farooq, Sajjad Zaheer. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (29 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Rapid growth of Islamic banking in developing countries is accompanied with claims about its relative resilience to financial crises as compared to conventional banking. However, little empirical evidence is available to support such claims. Using data from Pakistan, where Islamic and conventional banks co-exist, we compare these banks during a financial panic. Our results show that Islamic bank branches are less prone to deposit withdrawals during financial panics, both unconditionally and after controlling for bank characteristics. The Islamic branches of banks that have both Islamic and conventional operations tend to attract (rather than lose) deposits during panics, which suggests a role for religious branding. We also find that Islamic bank branches grant more loans during financial panics and that their lending decisions are less sensitive to changes in deposits. Our findings suggest that greater financial inclusion of faith-based groups may enhance the stability of the banking system. Mode of access: Internet Zaheer, Sajjad. IMF Working Papers; Working Paper ; No. 2015/041 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/041/001.2015.issue-041-en.xml IMF e-Library