The Impact of Investment Banking on Credit Risk: An Analytical Study of the Iraqi Credit Bank

Abstract

Purpose: The goal of this current research is to evaluation importance of investments and their evaluation especially after making investment decisions, comes from sound scientific foundations. In addition, the fields of investment have developed a lot in the past years in light of the rapid developments in the banking and financial industry facing banks, it has become imperative for banks to take into account the utmost caution and safety when investing their financial resources.                                                                                                                                                                   

Theoretical framework: the analytical study of the Iraqi Credit Bank was adopted as the research sample and as an analytical aspect of the bank to show the impact of investment banking on credit risks.                                                                                                                                                                          

Method/design/approach: The most important method used in measuring the evaluation of investments, financial statements were adopted for their importance in evaluating banking investments and their role in evaluating credit risks. The methods used in measuring bank credit risks included the standard approach that relies on the credit ratings developed by the external rating institution.                                                                                                                                                                 

 Results and conclusion: The research reached the most important conclusion, which is that the Iraqi banks, the research sample, do not use modern financial instruments represented by derivatives and innovative financial instruments used by many Arab and foreign financial and banking institutions to reduce risks and increase returns. The research concluded that the bank needs to work on preparing its employees to become qualified for this work by international standards.                                              

Research implications: The study affected the bank, the study sample, in exploiting liquidity and investing it in various investment fields to improve the profitability situation in banks in exchange for less risk.                                                                                                                                                                    

Originality/value: the analytical study of the Iraqi Credit Bank was adopted as the research sample and as an analytical aspect of the bank to show the impact of investment banking on credit risks.