Roundtable Discussions

The Risk Sharing Banking Model: A Prospective Channel For Development in Egypt?

Date : 5/3/2012

Speakers : Tarek El-Ghamrawy, ECES

Although the Egyptian banking sector has gone through several waves of reforms in the last two decades, it has yet to play its expected role as a catalyst for economic development. This roundtable discussion explored the viability of growing interest in the risk-sharing banking model as a possible approach to strengthen the currently weak developmental role of the Egyptian banking sector. Building on research findings, the roundtable first presented a new theoretical model comparing the investment process in the risk-sharing and the conventional systems. The presentation then empirically assessed the effect of applying the Islamic system on financial intermediation in a panel of 616 banks from 19 countries over the period 1996-2010. The main theoretical and empirical research findings were discussed, shedding light on the major prospects and challenges inherent in risk-sharing banking as a model for development. Finally, policy recommendations suggested ways to address challenges and capitalize on the potential of risk-sharing banking approach in promoting investment and growth in Egypt.