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Testing the Financial Stability of Banks in GCC Countries: Pre and Post Financial Crisis

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  • Prof. Dr. Hatem Hatef Abdulkadhim Altaee

    (Cihan University – Sulaimaniya, Kurdistan Region – Iraq)

  • Ibaa M. Anis Talo

    (M.Sc. Financial Management, M.Sc. Islamic Banking, United Nations, Damascus – Syria)

  • Mustafa Hassan Mohammad Adam, Ph.D

    (Cihan University – Sulaimaniya, Kurdistan Region – Iraq)

Abstract

Stability of the banking system is underpinned through an effective bank monitoring mechanism since the sector is resilient to a range of single and combined shocks. Banks financial stability in the Gulf Cooperation Council (GCC) countries was empirically assessed by using z-score as a dependent variable. A group of macro and microeconomic independent variables were selected to measure their effects on banks stability. All banks in this region that are considered Conventional or Islamic banks were selected. The targeted period was 2003-2010 to cover pre- and post- financial crisis. It was found that there is no evidence that there is a significant difference between the financial stability of Conventional and Islamic banks for the periods 2003-2010, 2003-2007, and 2008-2010. However, Conventional banks tend to be financially stronger than Islamic banks for the pre- financial crisis.

Suggested Citation

  • Prof. Dr. Hatem Hatef Abdulkadhim Altaee & Ibaa M. Anis Talo & Mustafa Hassan Mohammad Adam, Ph.D, 2013. "Testing the Financial Stability of Banks in GCC Countries: Pre and Post Financial Crisis," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 3(4), pages 93-105, April.
    • Handle: RePEc:mir:mirbus:v:3:y:2013:i:4:p:93-105
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    Cited by:

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    3. Ahmed Mahdi Belouafi & Chaouki Bourakba & Karima Saci, 2015. "Islamic Finance and Financial Stability: A Review of the Literature التمويل الإسلامي والاستقرار المالي: مراجعة الأدبيات النظرية," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 28(2), pages 3-42, July.
    4. Ameni GHENIMI & khaled OWEIS & Mohamed Ali OMRI, 2016. "Financial stability of islamic banks in the MENA countries during financial crisis and political uncertainty: an empirical investigation," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 7(1), June.
    5. Oparah Felix Chukwudi & James Tumba Henry, 2020. "Monetary Policy and Financial Stability in the Nigerian Banking Industry," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(1), pages 82-114, January.
    6. Omar Khlaif Gharaibeh & Buthiena Kharabsheh & Khaldoon Ahmad Al Daoud, 2022. "Risks, Bank Concentration and their Impact on Stability in Jordanian Commercial Banks," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 11, September.
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    9. Muhammad Ali & Chin-Hong Puah, 2018. "Does Bank Size and Funding Risk Effect Banks’ Stability? A Lesson from Pakistan," Global Business Review, International Management Institute, vol. 19(5), pages 1166-1186, October.

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