Analysis of The Reality of Sustainable Finance in Iraq for The Period (2009 – 2023)

This study aims to construct an Early Warning System (EWS) to predict banking crises in Iraq, serving as a case study for rentier economies that suffer from public sector dominance and excessive reliance on oil. ‎ ‎ The study utilized annual data for the period (2010-2023) with projections up to (2029), employing "Scenario Analysis" methodology and ‎Unit Root Tests (ADF). Micro-prudential indicators (such as Capital Adequacy, Liquidity, and Non-Performing Loans) were integrated ‎with governing macro-variables (Oil Prices, GDP, and Exchange Rates). ‎ ‎ The results indicated that "Liquidity Risk" constitutes the greatest systemic threat to the Iraqi banking sector, where crisis occurrence is ‎directly linked to oil shocks and the withdrawal of government deposits. Conversely, "Credit Risk" demonstrated a limited impact due to the ‎small size of the private sector credit portfolio. ‎ ‎ The study recommends the necessity of diversifying banking funding sources to decouple the link between the general budget and banking ‎liquidity‎.