Hypothesis, Operation Target, Risk Management: A Comparative Study of Islamic and Conventional Commercial Banks

Abstract

Based on modern financial intermediary theory, this paper examines the similarities and differences between Islamic banks and conventional commercial banks in the aspects of hypothesis about human nature, operation target, financial standardization and disclosure.The paper points out that Islamic banks have diverged from the ideal PSL model to lease and sales-based contracts in last 20 years, and moreover, the development and growth of Islamic banking was the result of reconciling conventional banking system with the sharia.In future, Islamic banks and conventional commercial banks will get more compatible in financial inclusion, risk management and theories on modern enterprise management.