A thesis submitted to the Council of the College of Administration and Economics – University of Karbala, which is part of the requirements for obtaining a master’s degree in economic sciences

Submitted by the student

Ali Jawad Kazim Al-Kerety

Supervised by

Prof. Dr

Hashim Marzoog Ali Al Shamari

Abstract

The research deals with studying the problematic relationship between household sector indebtedness and financial stability by studying the facts provided by economic theory, research and studies, and then studying the case of (Iraq, Egypt and Jordan) by collecting and analyzing facts and data related to the studied variables. The research problem is represented by the question of the impact of household sector indebtedness on financial stability in the sample countries. The research hypothesis is that the developments of financial globalization and financial openness have exacerbated systematic and irregular economic shocks, which made financial stability conditions more sensitive to developments in the size of household sector indebtedness. The research adopted the deductive approach, and through collecting and analyzing economic facts and related historical data, in addition to adopting the inductive approach by setting hypotheses between the studied relationships, and measuring and analyzing the relationship between the variables using statistical and standard analysis tools. The research reached a set of conclusions, the most important of which is the weak impact of the family sector’s indebtedness on financial stability due to the limited size of bank financing for the family sector and the structural imbalance in the relationship between family spending and bank credit, and the weak capabilities of the private sector to access and employ financing. The most prominent recommendations were the necessity of adopting an economic policy to enhance the role of the family sector in economic growth by increasing the credit provided to the family sector that enhances economic growth and according to family debt levels that are consistent with the requirements of sustainable financial stability.