Risk Governance and Bank Risk-Taking Behavior: Comparative Analysis of Islamic and Conventional Banking in Pakistan

Abstract

Objectives of the study are to experimentally discover the dimension where banking industry considers various managing risk methods and practices while trading with diverse risks and to assess managing risk operations of Islamic and conventional banking systems in Pakistan. Moreover, the methods used in analyzing and making comparative study of managing risks operations in Islamic and conventional banking system in Pakistan have been discussed. This research paper is built on quantifiable research methods. It uses primary data for analysis. The facts are collected from senior management of banks in Islamic and conventional banking system in Pakistan. The finding of the discussion shows that identification of risks, estimation of risk; understanding risks and managing risks are the very effective variables in contributing to managing risks operation of both types of banks working in Pakistan. On the contrary understanding risks and managing risk are the very important variables in managing risk operation of both banks. Furthermore, the discussion shows that there is a distinction among both banks regarding identifying risks and managing risks operations. The current study will be valuable for the manager of risks, professionals, conservative banks, Islamic banks and for those make policies, in addition to for the point of view of academics. The outcomes of this research will be valuable for improving the managing risks operations of banking industry working in Pakistan. It is also helpful for researchers and banks staff to have an image about the growth of managing risks operations of banks. While they will utilize the outcomes of this research paper to upgrade their managing risk operations, they will be capable to construct trust of the shareholders and participants of the market, which in return will increase their goodwill and revenue. Keywords: Risks Management Practices, Risks identification, Risks Assessment and                           Analysis, Credit Rating Analysis, Banking Sector