Risk Management Practiced Tools in the MENA Region: A Comparative Study between Islamic and Conventional Banks

The purpose of the study is to investigate the current risk management practices of Islamic and conventional banks in the MENA region. The study is based on a survey of 47 banks, including 24 conventional and 23 Islamic banks. The collected data were analysed using descriptive statistics and t-tests. The findings indicate that banks in MENA region have effective risk strategies and effective risk management frameworks in place. Furthermore, the findings reveal that credit risk is considered the most important for both conventional and Islamic banks followed by liquidity risk. Finally, both conventional and Islamic banks continue to rely on traditional credit risk mitigation tools. These findings have significant contributions to the literature by comprehensively clarifying and critically analysing the current state of risk management among the Islamic banks and conventional banks located in the MENA region.