XXVII
countries, along with volatile macro-economic situations, has affected both Islamic and
conventional banks alike in the post-crisis era (i.e., exchange rate and interest rate shocks).
However, prudential regulations are less defined for Islamic banks. Specific challenges include
the lack of a deposit insurance alternative for Islamic banks, the lack of commitment regarding
the lender of last resort, and the lack of a consistent stance from regulators that would force
Islamic bank managers to set aside a higher proportion of liquid assets in order to mitigate
financial distress or the risk of a bank run