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The Impact of Macroeconomic Determinants on Banking Stability and Risk (in Persian)

Author

Listed:
  • Janati, Abolfazl

    (Iran)

  • Arbabian, Shirin

    (Iran)

  • Khojasteh, Zeinab

    (Iran)

Abstract

Stability and the bankchr('39')s risk have become important, over the past few years and after the financial crisis of 2007. Many economic determinants at the micro and macro level create the risk of the banking and financial stability. Identifying and managing of these factors can help to reduce bank risk and also improve financial stability.In this paper, the impact of macroeconomic variables on risk and financial stability is examined across commercial banks of 18 countries during 2005-2014 with using panel data methods.The results show that the macroeconomic factors have significant effects on risk and banking stability. The economic growth and inflation rate increase the bank stability, but an increase in the exchange rate, budget deficit, and oil revenues reduce banking stability. According to the results, An increase in economic growth and decrease in inflation reduce credit risk but increases liquidity risk. The budget deficit is no significant effect on liquidity risk but also reduces credit risk.

Suggested Citation

  • Janati, Abolfazl & Arbabian, Shirin & Khojasteh, Zeinab, 2016. "The Impact of Macroeconomic Determinants on Banking Stability and Risk (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 9(29), pages 487-511, October.
    • Handle: RePEc:mbr:jmbres:v:9:y:2016:i:29:p:487-511
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    Cited by:

    1. Ahadifar , Alireza & Karimi Takanlo , Zahra & ranjpour , Reza & Haghighat , Jafar, 2021. "Investigation of Factors Affecting Banking Leverage in Selected Iranian Banks (Random-Coefficients Approach)," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 16(1), pages 21-42, March.

    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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