ISLAMIC BANKS, LIQUIDITY MANAGEMENT AND RISK-SHARING

Résumé

Bank liquidity stands as a key pillar in the survival of the financial system as it reflects its robustness and maturity. On the other hand, the recent introduction of Islamic banks in Morocco has provided a new ground to re-think the ongoing practices of liquidity Revue Économie, Gestion et Société N°21 août 2019 2 management. In fact, these practices have relied on questionable mechanism like Tawarruq that deviates from the basic principles of Islamic finance. Researchers agree that Risk-sharing stands in the center of the Islamic finance and therefore, is presented as an optimal model for an efficient banking model. However, operational constraints along with rigid regulatory framework have put this model on hold for years. (Bacha & Mirakhor, 2017)proposed a genuine model based on Risk-sharing that provides a complete banking structure that will enable Islamic banks to manage their liquidity along with optimizing their risk exposure. The proposed model is fully based on Risk-sharing and shari’ah-compliant instruments namely Sukuk. Hence, our paper aims to present the banking model along with the perspective of its application on the Moroccan case. We find that two main obstacles shall impede its application which is the operational and regulatory framework. Nevertheless, the first point could be easily being overcome with the maturity of the interbank market and the second point’s solution relies solely on the governmental will to develop the Islamic finance industry.