Transparency & Risk-Taking in Banking Governance From A Legal Perspective: A Comparative Study Between Islamic Banking Law in Kingdom of Saudi Arabia and Conventional Banking Law in the United States of America

Abstract

The multifaceted evolution and creation of money and currency has transformed the way humans conduct trade and commerce. From the barter system to the invention of coins, and eventually the emergence of printed money and banking systems, the concept of exchange has evolved over time. This study focuses on the banking governance of two distinct states, the Kingdom of Saudi Arabia, and the United States of America (“U.S.”) and aims to analyze the similarities and differences in the banking systems of both countries. The research entails an overview of the background, significance, and similarities and/or differences that constitute the main structure of the study. The banking sector plays a crucial role in maintaining economic stability in both countries, and this study delves into the growth and performance of the banking sector in the Kingdom of Saudi Arabia and the U.S., with a focus on banking governance under the Islamic law. Islamic banking governance differs from conventional banking systems, as it adheres to the Islamic principles and morals. The study aims to analyze the procedures, rules, and regulations exist in both countries, and how they are implemented in the context of stability, business orientation, and efficiency. The Shariah law, which serves as the primary source of rules and regulations for the Islamic banking governance in the Kingdom of Saudi Arabia, shapes the financial performance of Shariah-compliant banks. The research relies on a review of articles, journals, books, government published materials, and other online resources, in addition to the laws of the Kingdom of Saudi Arabia and the U.S., to obtain first-hand insights into the topic. The findings of this study will contribute to a better understanding of the similarities and differences between the Islamic banking governance and the U.S. banking governance and shed light on the performance of Shariah-compliant banks in the Kingdom of Saudi Arabia. In conclusion, this research explores the nuances of banking governance in Kingdom of Saudi Arabia and the U.S. and compares the two systems with a focus on the Islamic banking governance. The study provides valuable insights into the regulatory frameworks, implementation of rules and regulations, and financial performance of Shariah-compliant banks. The study also serves as a comprehensive reference for scholars, policymakers, and practitioners interested in the field of banking and finance. Further research and analysis in this area can contribute to the advancement of banking governance and its impact on the economy.