Trading off the cost of maintaining liquidity against the cost of insufficient liquidity
H igh liquid Assets:
Islamic banking may buy some return based assets instead of their cash hoardings. Despite being highly liquid, these assets have positive returns, and the bank can get profits of a joint venture in investment projects. Sukuk and Mosharekah bonds (Oragh-e-mosharakah) are samples of this type of assets in Islamic banking, which are replacements for bonds in conventional banking. The decision for maintaining this type of assets will be based on liquidity, inflation, rate of return of the real economy sector, and also economic conditions and regulations and etc.....
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