Assessing The Impact of Country Risk on Banks' Stability in Egypt: An Empirical Study Using Z-score Analysis.
Document Type
Article
Publication Date
Winter 1-1-2025
Abstract
This study investigates the impact of country risk—focusing on political and financial dimensions—on the stability of Egyptian banks over the period 2005 to 2023. Utilizing the Generalized Method of Moments (GMM) approach, I analyze how these risk dimensions influence bank stability, as measured by the Z-score. The findings reveal that political and financial risks have significant negative impacts on bank stability, highlighting the critical role of governance issues, external debt, and currency volatility in shaping banking resilience. Notably, while inflation shows a stabilizing effect, its long-term risks warrant careful policy management. The study underscores the interplay between macroeconomic and institutional factors in determining banking sector stability and provides actionable insights for policymakers and financial institutions. By addressing gaps in the literature, this research offers practical recommendations for enhancing bank resilience in high-risk environments such as Egypt.
Recommended Citation
Salem, R. A. (2025). Assessing the impact of country risk on banks' stability in Egypt: An empirical study using Z-score analysis. The Scientific Journal for Commercial and Environmental Studies, 16(1), 185–229. Suez Canal University, Faculty of Commerce Library.