Banking rating and its impact on achieving financial stability

Abstract

The paper examines the relationship between the banking indicators as independent variables and the financial stability of Iraqi banks (Z -Score) as a continued variable, by using a sample of 8 banks for the period 2017-2022. The results of the study showed that the percentage of capital adequacy negatively affects financial stability, while the proportion of liquid assets to obligations and loans to the deposit rate enhances financial stability. On the other hand, the NPL loan rate negatively affects stability. The study recommends the need to improve risk management, asset quality and increase liquidity ratio to achieve greater bank financial stability and enhance confidence in the banking system.