Overview

Original Research

BANKING STABILITY AND ITS DETERMINANTS THE CASE OF IRAQ

ISLAM S. T. BABELA 1, and SHIVAN A. M. DOSKI 2.

Vol 17, No 12 ( 2022 )   |  DOI: 10.5281/zenodo.7427292   |   Author Affiliation: College of Administration and Economics, University of Zakho, Kurdistan Region, Iraq, College of Administration and Economics, Banking and Financial Sciences Department, University of Zakho, Zakho Way Road, Duhok, Kurdistan Region, Iraq 1; College of Administration and Economics, University of Duhok, Kurdistan Region, Iraq 2.   |   Licensing: CC 4.0   |   Pg no: 297-315   |   To cite: ISLAM S. T. BABELA, and SHIVAN A. M. DOSKI. (2022). BANKING STABILITY AND ITS DETERMINANTS THE CASE OF IRAQ. 17(12), 297–315. https://doi.org/10.5281/zenodo.7427292   |   Published on: 12-12-2022

Abstract

The main purpose of the current study is to examine the factors affecting banking stability. The study has focused on panel data of a sample of 10 banks listed on the Iraqi Stock Exchange (henceforth ISX) over the period of 2010-2020 to investigate the impact of bank size, credit risk, bank efficiency, market concentration, regulatory quality, and Gross Domestic Product growth (henceforth GDP) on the Iraqi banking stability. Utilizing the Random Effect Model, the results were in two different directions. In terms of the variables bank size, credit risk, and market concentration, the outcomes have shown that these factors have a significantly negative effect on banking stability. Thus, these factors are considered to be determinants of Iraqi banking stability. In contrast, the output of the regression model has clearly illustrated that variables namely bank efficiency, regulatory quality, and GDP have significantly no effect on the stability of the Iraqi banking system. The results of the study may have a great benefit to the Iraqi banking sector and the relevant authorities.

Keywords

Banking stability; Iraqi Banking system; Iraqi stock exchange; Z-Score.