Banks’ Financial Stability and Macroeconomic Key Factors in GCC Countries

Purpose: This study examines the impact of macroeconomic factors on GCC banks’ stability. As countries still rely oil export revenues to cover government expenses and perform an undiversified economy, hence, increased awareness financial diversifications in sectors is needed contribute alongside sector then improve non-oil sectors’ investments order eliminate macro-financial linkage that causes any changes price whole system country. In this context, research selected most important such as GDP growth, inflation rate, exchange global crisis period (2008/2009), fluctuation, political instability within from 2005 2020, which covers many economic events. Design/methodology/approach: We used panel cointegration analysis, starting with a unit root test including PFMOLS PDOLS estimations. Additionally, FGLS estimation was due existence heteroskedasticity auto-correlation sample. Findings: The findings suggest there adverse relationship between (2008/2009) changes, stability Islamic conventional banks. However, bank less adversely affected by crisis, rate instability. Originality/value: proposed model provided better knowledge for regulators policymakers about external impacts stability, commit appropriate policy help reforming imbalances.