Survey on Relationship between Financial Development Indices of Banking and Non-Banking Sectors in Iran

Today, providing different economic, social and political indicators has become one of the most important researchers’ activities. This issue has also risen in banking and non-banking sectors. This paper aims to analyze Iran’s economic trend from financial development perspective by introducing and studying the banking and non-banking indicators and their relationship and also attempts to present possible solutions to the existing problems. The results show that in the non - banking sector, all the independent variables have meaningful relations to non-banking sector latent variable directly. It means that all the relations are established directly. Moreover, in the banking sector, value-added services variable in monetary and financial institutions, the banking network efficiency, private sectors’ share in banking, private sector’s share from banking facilities, the ratio of banks and monetary institutions’ assets to the assets of banking system have meaningful relation with banking sector latent variable directly. In addition, banking profit margins and banks’ focus degree have meaningful relation to banking sector latent variable indirectly. It implies all direct and indirect relations are established and the canonical correlation equals to 0.89.