Real Estate Risk & Exposure of Banking Institutions to Real Estate
||Ong, Seow Eng; Mohd Khairul, Muhammad Faishal Ibrahim, Le Thi Thanh Thao
||Real Estate Risk & Exposure of Banking Institutions to Real Estate
||20th Annual European Real Estate Society Conference in Vienna, Austria
||Analyzing the real estate risk sensitivity of GCC banking institutions, we found that both real estate loan and equity exposure of conventional and Islamic banks positively increases its real estate beta risk. The results persist across different subsamples. As expected, the effect is more persistent during time periods when bank's real estate exposure is elevated. Generally, due to the greater real estate exposure of Islamic banks, they possess greater real estate beta risk than conventional banks. However there is no evidence that Islamic banks real estate exposure has a differential effect on real estate risk vis-à-vis conventional banks. With limited Shariah compliant real estate hedging capabilities, improving the management of real estate risk in Islamic banks could be a potential foray for regulators and product structurers.
||Real estate exposure, Banks, Risk, Shariah compliance, GCC
Post discussion ...
||E-7: International Real Estate
These pages are best viewed with any standards compliant browser (e.g. Mozilla).