Stability of Islamic and Conventional banks, an empirical comparative analysis

The aim of this study is to investigate empirically the comparative stability of Islamic and Conventional banks for years 2005-08 to find out which one of them is more stable. We have taken accounting data from 8 countries for 66 banks out of which 26 Islamic and 40 Conventional ones. We performed our quantitative analysis by employing two dependent stability (risk) proxies, four bank level and three country level control variables through panel and cross-sectional regression.Based upon regression results of determinants ,we conclude that there are no statistically significant differences between Islamic and conventional banks’ stability during the period 2005-08. The stability difference between Islamic and conventional banks is also not evident in financial crisis proxy year (2008)