Investigating the Relationship between Bank Facilities and Economic Stability in Iran: an Islamic Banking Approach

This study aims to investigate the impact of granting bank facilities on product fluctuations. For this purpose, it uses the Iranian banking data in three categories of commercial banks, specialized banks and non-governmental banks during the period of 2006-2014 with quarterly frequency. Leamer test implies the using of pooled data model and applying a seemingly unrelated regression (SURE), so three equations are estimated simultaneously for aforementioned banks. The results show that the bank facilities granted have no significant effects on economic stability. The reasons for such conclusions are discussed. Accordingly, Iranian banks do not try to implement the Islamic banking laws.