Measuring and analyzing commercial bank indicators and their impact on market value in Iraq for the period 2004-2020

Abstract

This study aims to analyze the impact of commercial banks and their role in stimulating the Iraqi stock market during the period (2004-2020). This is done by relying on annual data issued by official institutions (the Central Bank of Iraq, the Iraqi Stock Exchange), as well as identifying the reality of the banking sector in Iraq and what are the most important tools that commercial banks use to influence the Iraqi securities market. The importance of commercial banks comes from their effective role in developing the stock market by investing in it and taking advantage of it to employ the funds available to it. The study attempts to shed light on the role that commercial banks play in the market. Their role is represented by using a group of banking services and credit facilities to activate the role of these markets, such as carrying out tasks in investment banking, such as grants, distribution, and advice, as well as its support for the transformation of joint-stock companies. We notice the development of commercial bank indicators during the years of the study, despite the dominance of government banks in the largest proportion of these indicators. Theoretical analysis was used in addition to standard analysis, by using commercial bank indicators represented by (assets, cash credit, deposits, and capital) and knowing the extent of their impact on the financial markets. The statistical program (Eviews12) was used to measure the relationship between them through the autoregressive distributed lag (ARDL) model. The study resulted in several findings, including the existence of a balanced relationship between commercial bank indicators, represented by (assets, cash credit, capital, and deposits) on the market value index in the market. Iraq Securities, as the significance of cash credit and its direct relationship with the market value becomes clear, and this is consistent with the reality of economic theory, while the effect of (capital and deposits) on the market value was negative and inverse, and this is what contradicts the reality of economic theory.