The Effect of World Economic Crisis on Islamic Bnking

World economic crisis had a significant effect on conventional banking such that this system encountered with a significant imbalance and deterioration. It is while that Islamic banking has maintained its stability during the crisis. So the evaluation of Islamic banks’ performance during the crisis and indices affecting the immunity of this system seems necessary. Therefore this paper using descriptive methodology and content analysis and library resources is to prove this hypothesis that “Islamic banking could have been immune from world economic crisis such that the amounts of Islamic banks’ assets have grown despite the crisis. The results show this fact that not only Islamic banks have maintained their stability during the crisis, but also they have experienced increasing growth rates. Banning riba-based transactions, emphasis on real contracts, investment risk distribution, relating money supply to real sector of economy, flexibility of capital raising expenses and limitation of speculative activities are among the reasons for this immunity.