Financial Depth and its Impact in Enhancing Financial Soundness in Gulf Cooperative Council States (GCC

Abstract

The study aims to study and determine the impact of Financial Depth, and through a set of indicators expressed, on the Financial Soundness index, expressed in the Z-Score index in Gulf Cooperative Council States (GCC). To achieve this, the research adopted a Fixed Effect methodology (FEM), Randomized Effect (REF) based on Balanced Panel Data for those countries and for the period (2000-2015) to reach 96 study views. The results of the estimate showed that the overall index of total deposits as a percentage of GDP, as a Financial Depth indicator, had a negative effect on the Financial Soundness expressed in the Z-Score index, While both private credit as a percentage of GDP and the Money Supply as a percentage of GDP, as indicators of Financial Depth, failed to demonstrate their impact on the Financial Soundness index