Purpose This study investigates the interconnectedness among local Omani banks listed on the Muscat Stock Exchange during both bear and bull markets, as well as across different investment horizons. It aims to understand how market volatility and investor sentiment affect the systemic risk, resilience, and efficiency of these financial institutions, especially during periods of market stress and uncertainty. Design/methodology/approach The research employs the quantile frequency connectedness approach of Chatziantoniou et al. (2022) using daily data for six Omani banks from June 10, 2012, to December 31, 2024. The analysis decomposes interbank connectedness across quantiles (to capture bear, normal, and bull markets) and investment horizons (short- and long-term), utilizing network analysis and advanced econometric techniques to identify dynamic systemic relationships. Findings The findings reveal significant variation in the roles and systemic importance of Omani banks across different market conditions and timeframes. Muscat Bank and Dhofar Bank consistently serve as major net transmitters of shocks, helping to stabilize the system during periods of market volatility, while Nizwa Bank is consistently a net receiver, indicating vulnerability and dependence on external funding. Connectedness is higher during financial crises (2015–2020), with short-term interactions showing rapid responses to market shocks and long-term interactions reflecting stable structural links. Network analysis emphasizes the central role of Muscat and Dhofar Banks, with Nizwa Bank remaining comparatively isolated. Research limitations/implications The analysis is limited to the banking sector, excluding potential interactions with other financial institutions such as insurance companies or investment funds. Future research should broaden the network to include these sectors and incorporate additional macroeconomic variables. Comparative studies across the Gulf Cooperation Council (GCC) countries could further contextualize systemic risk profiles and regulatory responses. Practical implications The study results offer actionable insights for regulators, policymakers and investors on identifying systemically important banks and designing targeted interventions to strengthen banking sector resilience. Understanding dynamic interbank linkages helps in stress testing, crisis management and developing regulatory policies to reduce systemic risk, especially in oil-dependent emerging economies like Oman. Originality/value This paper is the first to apply a quantile frequency connectedness approach to the Omani banking sector, offering a detailed, frequency-based view of systemic risk. It incorporates the effects of recent technological and regulatory changes, provides policy-relevant insights during crisis periods (e.g. COVID-19) and fills gaps in the literature regarding sustainability and efficiency in emerging markets. The research introduces a new empirical framework for analyzing financial networks across different market regimes.
Sami Al Kharusi (Wed,) studied this question.