The Impact of Financial Risk Management on Banking Performance: An Analytical Study in the Iraq Stock Exchange

Abstract

This research aims to study the impact of financial risk management on the performance of banks listed on the Iraq Stock Exchange. It highlights the importance of risk management in enhancing financial stability and improving the efficiency of banking operations. Financial risks are among the most prominent challenges facing the banking sector, particularly in light of economic fluctuations and financial instability that affect the banking environment. The study adopted an analytical approach, utilizing published financial data from banks listed on the Iraq Stock Exchange over a specific period. The goal was to measure the level of financial risk management and its impact on banking performance indicators. The study concluded that financial risk management plays a fundamental role in supporting banking performance. It contributes to reducing potential losses, improving the ability to cope with financial crises, and enhancing investor and depositor confidence in banks. The results also showed that banks with clear risk management policies exhibit better performance in terms of profitability and stability compared to banks with weak implementation of control and hedging procedures. The study concluded with a number of findings, most importantly that developing risk management systems is crucial.