Using the Herfindal-Hirschmann Index to measure the competition between banks operating in the Iraqi banking sector for the period (2011-2016)

Abstract

The study aims to measure the competition of the Iraqi banking sector, using the Herfindahl-Hirschman Index (HHI). The study included 49 working banks, 6 of which are governmental, 30 are local private banks, (13) private foreign banks, based on annual data for the period (2011-2016). A number of conclusions have been reached, most notably the high concentration of government banks (low competition). Competition between traditional private banks is high, while competition between Islamic private banks is monopolistic, and competition between foreign banks is monopolistic. The study concluded with a set of recommendations. The most important of which are: increase competition in the Iraqi banking sector, by creating appropriate conditions such as allowing government institutions to deposit their funds with private commercial banks and not only to deposit them in government banks; especially that competition plays an important role in improving the efficiency of banks and providing the best services. Moreover, the need for Islamic banks to modernize and innovate Islamic banking products such as Islamic Check and Islamic investment funds.