The impact of Islamic Securitization in improving the performance of Islamic banks

Abstract

The main objective of Islamic Banks is to achieve the economic and social development. hence, these banks are based on Islamic principles, they use different modes of Investment like( Mudaraba and Musharaka ),in practice, however, Islamic Banks do not apply these two modes of financing, but they use Murabaha, Salam, Istisna …because they carry less risk. Many Islamic banks lack liquidity instruments such as treasury bills and other marketable securities, which could be utilised either to cover liquidity shortages or to manage excess liquidity. This problem is aggravated since many Islamic banks work under operational procedures different from those of the central banks, which prevents the Islamic banks from utilising from the central bank as the last resort. therefore, Islamic banks could use Islamic securitization as a liquidity and risk management tool. The findings of this study indicate that Islamic securitization has positive impact on Islamic banks performance, whether legitimate, economic or social performance by solving some of their problems especially liquidity, risk management, and the absence of a longterm investment, we will see the detail all of the above in the body of this study