Islamic Financial Stability Factors: An Econometric Evidence

Fadoua Joudar (), Zouheir Msatfa, Olaya Metwalli, Maha Mouabid and Brahim Dinar
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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

Economies, 2023, vol. 11, issue 3, 1-13

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.

Keywords: financial stability; Islamic banking; Zscore; MENA region (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:11:y:2023:i:3:p:79-:d:1085610

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