The impact of financial fragility on the growth of deposits in the Arab banking
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Abstract: This research aims to measure the impact of financial fragility on deposits in the Arab banking sector for the period (2010-2024) in a group of Arab countries using the Autoregressive Distributed Lag (ARDL) model. The results show a statistically significant, positive, long-term equilibrium relationship between the financial fragility index and Arab banking sector deposits (Altman Z-Score). Furthermore, the results indicate that the impact of financial fragility on banking sector deposits is cumulative and long-term, consistent with the hypothesis that depositors' decisions are based more on indicators of financial soundness and sustainable banking stability than on short-term fluctuations in financial fragility levels. The research recommends that banks adopt sustainable programs to improve their financial resilience (capital adequacy, asset quality, risk management) rather than short-term solutions, given that the impact of improved financial fragility on deposit volume is cumulative over the long term.
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