The impact of the Corona pandemic on some financial safety indicators for selected countries, with reference to Iraq

A Thesis submitted by Student

Ameer Azhar Abdul Rasool

To the Council of the College of Management and Economics – University of Karbala, which is part of the requirements for obtaining a master’s degree in economic sciences

Supervised by

Assistant Professor Dr Sultan Jasem Alnasrawi

Abstract

At the end of 2019, the global economy was exposed to a health pandemic called the Corona pandemic. This pandemic led to the global economy paralyzing the system, which led to the cessation of most economic activities due to the measures taken by countries to mitigate the effects. Economic growth rates declined to unprecedented historical levels and public debt worsened until it reached unacceptable levels exceeding all standards, in addition to the high unemployment rates and poverty rates, which also affected the financial and banking stability conditions.

In this context, the research addresses the impact of the Corona pandemic on some financial safety indicators for selected countries, with special reference to Iraq. This interest in financial safety indicators came as they represent tools for evaluating the performance of the financial and banking system and its performance indicators and the repercussions of the Corona pandemic (Covid-19) on these indicators.

As for Iraq, the Central Bank of Iraq contributed by paying attention and using a lot of data related to financial safety indicators and regular operation in order to identify the health of the banking sector and system.

The research reached a number of conclusions, perhaps the most prominent of which is that most of the safety indicators in Iraq witnessed tangible increases during the period 2016-2022, and some indicators such as liquidity indicators and marginal capital adequacy indicators witnessed increases at rates higher than the rates set by the Basel Committee , as liquidity ratios were higher than (100%), while marginal capital adequacy ratios reached about (43.1)% in 2022, which reflects the ability of banks to confront potential risks. The financial safety risk map showed a trend towards the spread of the green color, which means the stability of most indicators, with the exception of some sub-indicators that were suffering from a state of instability. In light of this, the researcher recommends that banks take into account the proposals of the Basel Committee regarding overcoming the negative effects of banking risks, especially during this crisis and the rapid spread of the virus, in an effort to maintain financial stability, as well as develop effective future and strategic plans for the post-Corona (Covid-19) pandemic. Central banks must be prepared to provide abundant liquidity to banks and financial companies, especially those that lend to small and medium-sized enterprises, as these institutions are expected to be less able to confront this crisis. It is necessary to work on continuing to improve and develop the infrastructure of the banking sector and benefit from modern technological techniques in order to prepare and publish financial safety indicators in a lesson-based manner, given their role in knowing the health and safety of the banking sector.