Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)


The Impact of Financial Flexibility on the Financial Stability of Banks: An Analytical Study of a Sample of Iraqi Banks for the Period from 2006 to 2019

Author(s): Faris Ali Ahmed, Al- Suwayfi, Hayder Abdullah, Mohammed Abdul-Hussein Jasim and Alfalahi Hussein Abdulameer

The study aimed to determine the effect of financial flexibility on the financial stability of banks to identify indicators of financial flexibility that enhance financial stability in banks. The study was conducted in the sector of Iraqi private commercial banks listed on the Iraq Stock Exchange and the sample of the study included (8) Iraqi banks for the period (2006-2019) as the variables of the study were measured by adopting appropriate financial indicators for the financial flexibility and using the (Z - Score) scale to determine the level of the financial stability, as well as the appropriate statistical equations for this study and in order to achieve the objectives of the study, the hypotheses of the study were formulated and then tested by advanced statistical means based on the program (SPSS V.25). The study reached a set of results, the most important of which is that (Iraqi banks reserve high monetary and quasi-monetary assets and this is good in the short term, but these banks will be exposed to bearing the costs of the sources of these funds without exploiting them, and this will negatively affect the profitability). The study was concluded with a number of recommendations, the most important of which is that (banks which were considered the sample of the study did not adopt clear investment policies, making the net cash flows be volatile (wavering), which necessitates conducting a number of studies to put in place the appropriate policies to maintain the financial flexibility while optimizing the use of cash assets).

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