Analysis of The Reality of Sustainable Finance in Iraq for The Period (2009 – 2023)‎

  • Authors

    • Sara Jawad Kadhim AL-Bakri University of Babylon / College of Administration and Economics
    • Dr. Ahmed Khalel Alhussainy University of Babylon / College of Administration and Economics
    https://doi.org/10.14419/fanjjb54

    Received date: December 30, 2025

    Accepted date: January 19, 2026

    Published date: February 1, 2026

  • Early Warning System (EWS); Banking Crises; Scenario Analysis; Iraqi Economy; Liquidity; Oil Shocks

  • Abstract

    This study aims to construct an Early Warning System (EWS) to predict banking crises in Iraq, serving as a case study for rentier economies that suffer from public sector dominance and excessive reliance on oil. ‎

    ‎ The study utilized annual data for the period (2010-2023) with projections up to (2029), employing "Scenario Analysis" methodology and ‎Unit Root Tests (ADF). Micro-prudential indicators (such as Capital Adequacy, Liquidity, and Non-Performing Loans) were integrated ‎with governing macro-variables (Oil Prices, GDP, and Exchange Rates). ‎

    ‎ The results indicated that "Liquidity Risk" constitutes the greatest systemic threat to the Iraqi banking sector, where crisis occurrence is ‎directly linked to oil shocks and the withdrawal of government deposits. Conversely, "Credit Risk" demonstrated a limited impact due to the ‎small size of the private sector credit portfolio. ‎

    ‎ The study recommends the necessity of diversifying banking funding sources to decouple the link between the general budget and banking ‎liquidity‎.

  • References

    1. Adham Mohammed Al-Barmawi, Banking Crises and Contagion: The Domino Effect and the Silicon Valley Bank Crisis, Contemporary Economic Horizons, 2023, p. 2.
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    3. Arezki, R., et al. (2020). Oil Price Volatility and Financial Stability in Resource-Rich Economies. Journal of International Money and Finance, 101, 102-115.
    4. Demirgüç-Kunt, A., & Detragiache, E. (1998). The Determinants of Banking Crises in Developing and Developed Countries. IMF Staff Papers. https://doi.org/10.2307/3867330.
    5. Joy, M., et al. (2021). Banking systemic vulnerability: A early warning system for emerging markets. Journal of Financial Stability, 56, 100-112.
    6. Kaminsky, G. L., & Reinhart, C. M. (1996). The Twin Crises: The Causes of Banking and Balance-of-Payments Problems. American Economic Re-view. https://doi.org/10.17016/ifdp.1996.544.

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  • How to Cite

    AL-Bakri , S. J. K. ., & Alhussainy, D. A. K. . (2026). Analysis of The Reality of Sustainable Finance in Iraq for The Period (2009 – 2023)‎. International Journal of Accounting and Economics Studies, 13(1), 638-646. https://doi.org/10.14419/fanjjb54