Assessment and Analysis of Banking Network Stability in Iran Using a Hybrid Model
Keywords:
Banking Network Stability, Financial Crisis, Confirmatory Factor Analysis, Monte Carlo SimulationAbstract
Banking network stability, as one of the fundamental pillars of the financial system, plays a decisive role in maintaining economic stability, strengthening public confidence, and supporting sustainable development. Considering the growing complexity of the financial environment, the expansion of systemic risks, and rapid technological transformations, the need for a comprehensive framework to analyze and enhance banking network stability has become increasingly significant. The objective of the present study is to develop a hybrid model for assessing and analyzing the stability of the national banking network through an integrated approach. In terms of purpose, this research is applied, and methodologically it adopts a mixed and analytical design. In the first phase, Confirmatory Factor Analysis (CFA) was employed to identify, classify, and validate the structure of the extracted dimensions. The results indicated an acceptable model fit and confirmed the validity and reliability of the constructs. In the second phase, Monte Carlo simulation was conducted using data from 20 selected domestic banks to evaluate the behavior of the banking network under various economic shock scenarios and risk volatility conditions. The findings revealed that capital adequacy, asset quality, corporate governance, and technological infrastructure represent the most influential determinants of banking network stability. The innovation of the study lies in integrating qualitative approaches, structural modeling, and probabilistic simulation to provide a comprehensive and context-specific framework for analyzing banking network stability, which can serve as a decision-making foundation for financial policymakers aimed at strengthening stability and risk management.
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Copyright (c) 2025 Fatemeh Khaleghi Maybodi (Author); Alireza Rayati Shavazi; Gholamreza Askarzadeh Dareh, Seyed Yahya Abtahi (Author)
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