Analyzing the Impact of Intermediary Products of Commercial Banks on Iran's Economic Instability (1981-2007)

Banks as important financial institutions have drawn attention of economic researchers because their impacts on various economic sectors. Despite positive role which banks play, they cause economic instability due to providing services particularly intermediary ones, so that most of economic researchers consider banks as main cause of current financial crisis. With regard to role of banks in economic instability, this research pays attention to financial intermediary role of commercial banks as their main product on economic instability. In particular, this research tests the impact of commercial bank products on economic instability as the core hypothesis. The results show that commercial banks as financial intermediaries had negative impact on Iran’s Economic stability during 1981-2007.