Application of the capital adequacy standard according to the Basel III agreement in Islamic banks - an applied analytical study on the Kuwait international bank during the period (2015 – 2022)

Resumo

The capital adequacy standard according to Basel III is considered one of the most prominent tools for hedging risks, and it is imposed by all central banks. However, Islamic banks find some difficults to apply this standard, as it is intended for conventional banks. An Islamic standard issued by the Islamic Financial Services Board amending the Basel III standard has been issued with the aim of applying it by Islamic banks. However, Basel III remains the most accepted standard in the international banking arena. This study aims to know the possibility of Islamic banks applying the standard issued by the Basel III agreement on capital adequacy, or whether should apply the Islamic standard issued by the IFSB, This study was conducted using the descriptive approach, the case study approach and the analytical approach, which allowed us to reach a set of results, the most important of which is that Islamic banks can apply Basel III standard, but applying the Islamic standard issued by IFSB is more appropriate because it takes into account the characteristics of Islamic banks in the capital adequacy equation.