Measuring and Analyzing the impact of financial stability determinants on bank capital adequacy

Abstract

This research aims to identify the theoretical and intellectual aspects and test the impact of financial stability indicators and their role in reducing the decline in banking capital adequacy. Therefore, the main research question will be about the existence of a significant significance of stability determinants on the capital adequacy of the banks in the study sample. Through a main hypothesis stating: The existence of a significant impact of the independent variable (financial stability determinants) on the dependent variable (capital adequacy index), which was tested in a sample of private Iraqi commercial banks represented by (the National Bank of Iraq, Bank of Baghdad, Gulf Bank, Ashur International Bank, and Middle East Bank). To prove or refute the aforementioned hypotheses, and to address the main research question, the descriptive approach was followed in presenting the concepts and information specific to the field of study, and adopting the standard approach represented by a proposed model and analyzing the panel data methodology by measuring the determinants of financial stability and their impact on capital adequacy in a sample of private Iraqi banks. Then, the results were drawn. The research results proved the validity of the hypothesis, while the research recommended the necessity of enhancing transparency and financial disclosure, and developing analytical tools to monitor financial stability indicators periodically.