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This paper attempts to estimate the determinants of crises on Islamic banking system during financial crises using early warning system (EWS) with particular focus on the element of profit–loss sharing. Profit–loss sharing has significant impact in reducing crisis probability experienced by the Islamic banking system. This suggests that profit–loss sharing may be considered as one of the risk mitigation techniques for bank to remain resilient during the crises. The results further show that full-fledged Islamic banks have higher chances of experiencing crises relative to the Islamic subsidiaries banks. In addition, economic freedom and overvaluation in the currency are more likely exposed to banks to the crises.

This study analyzes the impact of financing structure on Islamic banks’ insolvency risk exposure. By analyzing four models, we find that an increase in real estate financing decreases insolvency risk; however, an increasing concentration of financing structure increases insolvency risk. We discover that increasing the stability of the financing structure reduces risk in the short term, but not in the medium term. Interestingly, our findings show that the level of insolvency risk exposure during the 1997 Asian financial crisis was lower than it was for the overall period, whereas it is higher than the overall average in the ongoing global economic crisis. Thus, regulatory bodies, policymakers, and market players in the Islamic banking industry should take appropriate action to in manage the insolvency risk of Islamic banks.

Disruptive innovation is related to financial technology and known as FinTech. It includes design, delivery, and provider of financial investment services such as payments, real estate, investment, insurance/ takaful, deposits, financing, banking, saving and capital market. This study is about Adoption of Financial Technology (FinTech) in mutual fund/ unit trust investment among Malaysians: Unified Theory of Acceptance and Use of Technology (UTAUT). The study aims to identify the level of financial technology consumption in mutual fund/ unit trust among investors in Malaysia. The objectives of this research are: 1) to determine the level of awareness on FinTech application in mutual fund/ unit trust investment; 2) to examine the adoption of FinTech in mutual fund/ unit trust investment. The objectives will explore on how FinTech changes the customers in terms of to what extent Malaysians have adopted FinTech so far. The research methodology in an adoption of FinTech service in mutual fund/ unit trust was conducted through questionnaires survey. This study assists participants in financial service management to take advantage of the opportunities offered by FinTech services. Developing the effective and systematic framework is a must for FinTech service especially in mutual fund/ unit trust investment. Implementation of FinTech will provide service improvement and transformation for investment management services in future.

This study investigates the determinants of the three-factor capital asset pricing model (CAPM) risk exposures in the case of commercial banks. Five risk exposures are examined namely, market, interest rate, exchange rate, total, and unsystematic risk exposures. Our findings provide four major contributions. First, we find that different types of risk exposures have different determinants. Second, the market risk exposure for the Islamic bank in our study is lower than for conventional banks. Third, the merger programme is fruitful because it reduces the interest rate risk exposure, total risk exposure, and unsystematic risk exposure. Finally, our results show that the banks under study have higher total and unsystematic risk exposures during the 1997 Asian financial crisis. Thus, a clear understanding of this evidence helps in ensuring effective and successful decision-making for regulators, policy makers and market players.

This study addresses the linkages between lending structure and market risk exposure. The influence of lending structure is analysed by four measures: the real estate lending, the specialisation index, the short-term lending stability, and the medium-term lending stability. Our findings show that lending structure to some extent affects the market risk exposure to some extend. At the same time, listed bank holding companies showed higher levels of market risk during and after the 1997 Asian financial crisis. Meanwhile, the desired effect of bank mergers in terms of reducing market risk exposure did not materialise in this study. Thus, the findings of this study posits at least two implications; (1) policy makers should react accordingly in the decision-making process towards achieving the expected result of the monetary policy transmission mechanism, and (2) banks and investors should account the impact of lending structures in addition to the significance effect of loan expansion and management efficiency when determining market risk exposure of bank holding companies.

Evidence thus far suggests fair value accounting poses risk and affects firms’ returns in some ways. This research, on a sample of Asian banks, improves the understanding of the information risk effect of fair value accounting by examining the moderating role of risk disclosure in the relationship between fair value accounting and the cost of equity capital. The results from a generalised method of moments on dynamic panel data analysis, show that risk disclosure mitigates the asymmetric information problem. Thus the findings contribute towards the standard setters’ effort in improving the practice of fair value accounting, and suggest that there are benefits in mandating disclosure especially for banks.

The student-centered learning (SCL) approach is an approach to education that focuses on learners and their needs, rather than relying upon the input of the teacher's. The present paper examines how the SCL approach is integrated as a learner-centered paradigm into finance courses offered at a business school in a research university in Malaysia. Specifically, this paper identifies how a learner-centered environment is integrated into teaching methods, learning activities and evaluation tools. Since the adoption of the SCL approach is partly to cater for the needs of the research university, the analysis of the courses is supported with responses from the respective lecturers. This study finds that the lecturers of the five courses examined have used active/interactive learning and group project approaches as standard teaching methods under the SCL approach which includes projects, class discussion and presentation. Alongside these standard methods, some of the courses use additional methods under the SCL approach, including real life experiential learning and case studies. For example, students of the Investment and Portfolio Analysis course are exposed to the real world investment decision making by investing funds in selected stocks listed on Bursa Malaysia. In terms of course evaluations, the courses place greater weight on continuous assessment based on group projects and presentations, while reduce the emphasis on examinations. Overall, implementing the SCL approach requires a careful design of the learning process, which includes the classroom setting; flexibility of the curriculum; teaching methods; evaluation policies; and course content. In general, the study demonstrates that SCL has great potential to function as an effective learning tool in an environment where the labor market demands generically skilled job candidates and in which universities are demanding further resources to be devoted to efforts relating to research and publications.

Islamic banks operate in a different manner from conventional banks, particularly in adopting profit loss sharing contracts, resulting in arguably different risks and profitability profiles. Drawing from the Islamic principle of full disclosure, stakeholder and signalling theories, this research examines whether there is a relationship between risk, profitability measures and the level of risk disclosure. Using a sample of Islamic banks in Asia, the Middle East and Europe for the period between 2006 and 2009, the results from a panel data analysis confirm a positive association between return on equity and risk disclosure. There is modest evidence of a negative association between risk (as measured by leverage and proportion of loan to total asset) and risk disclosure. The results generally support the signalling theory rather than the stakeholder theory. A major policy implication is that risk disclosure should be mandatory as voluntary disclosure cannot be expected.

Risk management is a pivotal factor for managing financial institutions. Efficient and sustainable banking activity requires managers to take all sources of instability into account and to adopt strategies against risks. The objective of the present paper is to investigate the sources of bank risks with a straightforward and comprehensive risk measurement for the East Asian region. The Z-risk index and a three-factor Capital Asset Pricing Model (CAPM) are adopted to estimate the probability of insolvency, systematic bank risks and unsystematic bank risks. The results demonstrate that banks in East Asian countries are exposed to a variety of risk exposures. Also, the findings show that banks with lower unsystematic risks do not necessarily have lower insolvency risks, indicating that the sources of insolvency risk are complicated and need further research. Finally, a regional cooperation strategy among banks is suggested so that exchange rate and interest rate risks can be reduced. Keywords: East Asian banks; insolvency risk; three-factor CAPM; stock market; debt market; foreign exchange market ABSTRAK Pengurusan risko merupakan faktor penting bagi pengurusan institusi kewangan. Institusi perbankan yang efisyen dan mampan memerlukan pengurus mengambilkira semua sumber yang menyumbang kepada ketidakstabilan ekonomi. Di samping itu, kecekapan dan kelestarian bank juga bergantung kepada sejauhmana bank melaksanakan strategi untuk mengurangkan risiko. Objektif kajian ini adalah untuk melihat sumber-sumber risiko bank melalui pengukuran yang mudah dan komprehensif bagi wilayah Asia Timur. Khususnya, kajian ini menggunakan keadah indek risiko-Z dan Model Penetapan Harga Aset Modal (CAPM) tiga faktor (CAPM) bagi menganggar kebarangkalian bank untuk menjadi tidak solven serta risiko sistematik dan tidak sistematik yang dihadapi oleh bank. Hasil kajian menunjukkan bahawa institusi perbankan di wilayah Asia Timur terdedah kepada pelbagai jenis risiko. Hasil kajian juga menunjukkan bahawa bank yang mempunyai tahap risiko tidak sistematik yang rendah tidak semestinya mempunyai tahap risiko tidak solven yang rendah, seterusnya menggambarkan bahawa punca kepada risiko tidak solven adalah canggih dan rumit serta memerlukan kajian lanjut. Di samping itu, kajian ini menyarankan strategi kerjasama bank di peringkat serantau agar pendedahan risiko terhadap turun-naik kadar tukaran wang asing dan kadar faedah dapat dikurangkan. Kata kunci: Bank di wilayah Asia timur; risiko bank tidak solven; CAPM tiga-faktor; pasaran saham; pasaran hutang; pasaran tukaran asing