Financial Stability In Islamic And Conventional Banks – An Analytical And Econometric Study-

This paper aims to measure the financial stability of both Islamic and conventional banks before, during and after the financial crisis 2008. And to measure the financial stability we applied the Altman’s model called “z score” on a sample that consisted of fourteen banks, including nine conventional banks with 324 observation and five Islamic banks with 180 observation spread over two countries: Saudi Arabia and bahrain. We took into consideration the quarters’ data during the study period stretching from 2007 to 2015. The research focuses as well on some variables that affect the stability indicator “z score” including banking variables. Some variables are associated with the banking sector, others with macroeconomics and the statistical tests and procedures necessary in the “z-score” model to reach important results.