Abstract
The study aims to try to reach a diagnosis of the mechanism of the impact of financial openness on the indicators of the banking sector development (Depth BD, Stability BS, Access BA), as well as building a quantitative model capable of estimating the nature of the effects and their interpretation that can be practiced by financial openness in the indicators of the banking sector development in the Arab countries (Algeria, Bahrain, Egypt, Jordan ,Kuwait, Lebanon, Morocco, Oman) for the period 1996-2019, adopted the methodology of what is known as the pooled regression model (PRM), the fixed-effect model (FEM) and the random effect model (REM) based on the Balanced Panel Data, and the study found that financial openness exerts a positive impact on the three indicators of the banking sector development, represented by the liquid liabilities index relative to GDP (LL), which expresses banking depth (BD), the Z-score index, which expresses banking stability (BS), and the concentration index. Banking (the proportion of banking assets held by the first five banks) (CO), which expresses access to banking services (BA), so liberal policies that support its positive impact on the banking sector development indicators should be adopted.
