We examine the differences in risk between Islamic and conventional banks with specific attention
to the role of Shariah supervisory board (SSB) composition on risk in Islamic banks. Using
a sample of banks from 28 countries, we find that Islamic banks have a higher liquidity risk,
lower credit risk, lower insolvency risk, but encounter similar operational risk in comparison
with conventional banks. Operational and insolvency risks in Islamic banks decline with an increase
in SSB size and SSB members' academic qualifications, but increase with an increase in the
number of reputed Shariah scholars on the SSB. The SSB attributes do not have significant influence
on liquidity and credit risks. The findings are robust to alternative risk measures, and the
use of a system GMM estimator.