Identifying the Factors Affecting Financial Stability and Strengthening Iran's Banking System and Providing Policy Solutions

In recent years, the operation of the country's banks, affected by internal factors and changes in macroeconomic factors, became unstable and irresistible. This led to the inability to establish stability and the emergence of inefficiency of the economic environment in the functioning of the banking network. Following this, bank executives aimed to identify the factors which affected the resilience of banks and tried to eliminate their vulnerabilities in order to provide the maximum possible benefits, as well as solutions for reforming, strengthening, clarifying, and making the banking system a healthy entity. In the same vein, the components affecting the financial stability and strengthening of the banking system were identified in this study through a mixed methods approach. The results showed that the factors affecting the stability and strengthening of the banking system are classified into two general groups: 1. Environmental and external factors, including macroeconomic conditions, the central bank, the government and higher-order authorities, together with socio-cultural infrastructure; 2. Internal and specific banking factors, including financial health and strengthening of income sources, administrative health and corruption control, excellence of organizational resources and making them intelligent, and innovative management of services and products. The findings revealed that financial health and strengthening of income sources (0.2304), macroeconomic conditions and its stability (0.2150), and the central bank, government, and higher-order authorities (0.1558) are more important in the stability and strengthening of the banking system, which requires executives and planners of the banking system to take them into serious consideration.