The Impact of Banking Liquidity on Bank Credit: A Case Study of State-Owned Banks in Iraq for the Period (2010–2023)

ABSTRACT Government banks are one of the most important pillars of the Iraqi banking system and key players in building the Iraqi economy. This is due to their important role as intermediary and depository institutions between depositors and lenders, as well as the banking services they provide to keep pace with rapid digital development. Therefore, bank liquidity indicators for credit are important indicators that reflect the ability of government banks to comply with the Central Bank's standard instructions. To address the research problem, which is the lack of clarity about the nature and severity of the impact of cash liquidity on the volume of bank credit granted, the current research aims to analyze the level of cash liquidity in the Iraqi banking sector over the period from 2010 to 2023 and identify the most prominent factors influencing it. This study was conducted on a sample of government banks operating in Iraq for the period from 2010 to 2023. It adopted a descriptive analytical approach, relying on information specific to government banks obtained from official bodies, including the Central Bank of Iraq and the Iraq Stock Exchange. The researcher reached a set of conclusions and recommendations, the most important of which was a significant increase in fixed deposits. Data on the volume of deposits after 2018 showed an improvement in the volume of deposits due to improved economic conditions and the expansion of the use of electronic payment methods. The capital adequacy index improved by 53% in 2023, demonstrating the strength of government banks in attracting investors. The researcher recommends the need to support digital transformation and expand electronic payment services to reduce reliance on cash and improve efficiency.