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Islamic Financial Stability Factors: An Econometric Evidence

Author

Listed:
  • Fadoua Joudar

    (Faculty of Economics and Management Settat, Hassan First University, Settat 26000, Morocco)

  • Zouheir Msatfa

    (Faculty of Economics and Management Settat, Hassan First University, Settat 26000, Morocco)

  • Olaya Metwalli

    (Faculty of Economics and Management Settat, Hassan First University, Settat 26000, Morocco)

  • Maha Mouabid

    (Faculty of Economics and Management Settat, Hassan First University, Settat 26000, Morocco)

  • Brahim Dinar

    (Faculty of Law, Economics and Social Sciences Casablanca, University of Hassan II, Casablanca 20470, Morocco)

Abstract

This study empirically examines the internal and external factors of Islamic banks’ financial stability during the time frame from 2006 to 2017 in the Middle Eastern and North African (MENA) region. The stability of Islamic banks was determined by the Z-score, which is one of the most well-known financial stability indicators. Using multiple regression analysis, it is shown that capital adequacy ratio and liquidity positively impact the Z-score of Islamic banks, whilst size, governance and level of concentration have a negative impact. This study recommends raising the capital and the liquidity level of Islamic banks as it helps to promote the financial stability of Islamic banks.

Suggested Citation

  • Fadoua Joudar & Zouheir Msatfa & Olaya Metwalli & Maha Mouabid & Brahim Dinar, 2023. "Islamic Financial Stability Factors: An Econometric Evidence," Economies, MDPI, vol. 11(3), pages 1-13, March.
    • Handle: RePEc:gam:jecomi:v:11:y:2023:i:3:p:79-:d:1085610
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    References listed on IDEAS

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    Cited by:

    1. Elena G. Shershneva, Min Zhou Hao, 2024. "Russian Banks Financial Stability Loss Diagnostic: Multidimensional Logit-Model Approach," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 23(2), pages 476-498.
    2. Elena G. Shershneva, 2024. "CAMELS parameters’ impact on the risk of losing financial stability: The case of Russian banks," Journal of New Economy, Ural State University of Economics, vol. 25(2), pages 130-152, July.

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