THE STUDY OF RISKS IN ISLAMIC AND CONVENTIONAL BANKS

Islamic Banking is an intrest- free banking system. It makes these banks at risk. In other word the sharing pofits and decress. It’s obvios that islamic banks are move at risk because of being intrest- free. So three will be a negtive suggetion in evaluation After explaining about islsmic and conventional banking and the used equipments in each, this research will studu the four main isks in them: Credit risk, Liqudity risk, Market risk and profit ratelin trest rates risk. The research provides the process of manage,ent of Islamic and civentional banks based on ROE and the results of study about these four risks. 1. Considing that the conventional banks use all of financial tools at their system the vacillation of intrest rate efects both bank incom and the pare value of bank. 2. In Islamic banks the intrest rate of money is forbiden and generally their is no intrest in this system so there is no risk of intrest rate vacillation is islamic banking system. But if we compare the intrest rate in islamic banking with the risk of profit rate vacillation from money and credit asositic it would be clear that the risk of intrest rate vacillation in islamic banking is less than the parallel risk in conventional banking based two reasons 1- Less vacillation in the intrest rate level in islamic banking 2- Islamic bank are not forced to pay bank the profit of money to deposits. Liqidity risk: The liqidity is less in islamic banking bacause of the rules of islam in cash.

Risk, banking, Islamic, conventional.