Identifying and Determining Factors Affecting the Resilience of the Iranian Banking System

Subject Areas : Labor and Demographic Economics

Azadeh Afshari ¹ , Sara Ghobadi ² , Hosein Sharifi Renani ³

1 - PhD Student. Faculty of Administrative Sciences and Economics, Khorasgan Branch,Islamic Azad University, Isfahan, Iran
2 - Assistant Professor, Faculty of Administrative Sciences and Economics, khorasgan Branch, Islamic Azad University, Isfahan, Iran
3 - Associate Professor of Governance Department, Khorasgan Branch, Islamic Azad University, Isfahan, Iran

Received: 2023-03-23 Accepted : 2023-08-05 Published : 2023-08-05

Keywords: G24, Banking Profitability, Banking Resilience, Banking Risk-taking, JEL Classification: G20, C52 Keywords: Banking Efficiency,

Abstract :

According to the emphasis of the Ball Committee, the survival rate of any economy is proportional to the resilience rate of its banks, and, when economic crises occur, the resilience of banks is too important. Then the purpose of this research is to investigate the indicators of the development of the banking sector that can affect the resilience of the Iranian banking system. Therefore, with the help of previous research, some factors were identified and the data were collected for 30 banks and credit institutions during the years 2000 to 2020 in the form of unbalanced panels. After that, the level of resilience was calculated with the help of the Volare index, and the type of relationships was evaluated with the help of the dynamic data panel method. The results showed that among the 18 indicators investigated as factors affecting the resilience of the Iranian banking system, only 9 factors are nonlinearly related to resilience. Resilience variables of the previous period, banking efficiency, the ratio of Interest-Free Income to total income, and the ratio of low-cost resources to total resources, have a direct relationship with resilience, and the indicators of bank size, shareholders' equity to debt, the ratio of loans to free resources, the ratio of the cost of doubtful loans to total expenses and the level of risk tolerance, had an indirect relationship. Also, private or public banks had no significant relationship with resilience. In conclusion, the resilience process of Iranian banks from 2000 to 2020 was drawn.

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