D.mzar Mohammed Saleh *: Iraqi banking sector: reality and how we want to - comment on the search conciliator professor Mahmoud **

- PUBLISHED IN 01/31/2016

I agree with Mazhb him Honorable Dr. Ali Khudair Mirza *** on Helms study prepared earlier by Prof. Aziz conciliator Hassan Mahmoud and important themes and basic, which saved her writer which is surrounded by Iraqi banking business and institutions operating, and we would like to make it clear in this matter Mayati: -

1. The ideas contained in the study fruit of debates and ideas already put forward and circulation in many Iraqi economic forums, particularly banking which was a conciliator, a professor of Alrjalat Almtsidin her without doubt. We therefore agree with most of the points contained therein so as to achieve attainment of national banking market incompetent enjoy high degree of efficiency and institutional governance.

2. The study focused on the important topic related to banking supervision preventive college particularly addressed the issue of the so-called pressure testing up stress tests. Noting that this subject developed by the Bank for International Settlements in Basel after the global financial crisis in 2008, aims to test the strength of banks' capital in the face of external vibrations, particularly in the case of our country Aleom.az noticed that the effects of the balance of payments on macroeconomic variables and economic sectors associated with (ie, by the decline in oil prices generally and the banking sector in particular sectoral activities). Here lies the importance of knowing the Iraqi ability of banks to cope with the ups and downs in other macroeconomic variables such as exchange rates, unemployment and the general level of prices and economic growth as well as landing on the solvency and safety of banks.

For example, the EU conducted a year stress tests before or intensity stress tests on 99 banks, a European president using the minimum capital adequacy amounting to 6% (ie capital and reserves the right divided by the bank credit is likely risks) as it found that there were seven large European banks may really failed to reach the capital adequacy ratio or Registered Anfa, which led the European Central Bank to raise the capital adequacy ratio for banks from a minimum of 6% to be 8%. While the seven banks placed under strict banking supervision. In this regard we support the direction indicated by the study, the adoption of stress tests or distress as a way novelty in preventive banking supervision exercised by the college to the Iraqi Central Bank to the banks to ensure their solvency and liquidity safety.

3. The study also touched on the subject of bankruptcies suffered by some Iraqi banks and is truly one of the problems of liquidity or solvency or weakness of integrity among some boards of directors of private banks, a case watched by the Central Bank of Iraq seriously within the control and supervision of operations and governance of the banking business, laws and regulations banking window as well About Turning again to the issue of restructuring of Rafidain and Rasheed.

4. Finally, we support what the study confirmed the advancement in methods of foreign trade financing to the private sector through letters of credit instead of relying entirely on the direct conversion of the central bank window mechanisms. But the study did not propose with a strong push alternatives in how to overcome the obstacles to the work of this cumulative institutional style and the face of the weakness of the banking market experiences of the mechanisms of foreign trade financing by opening letters of credit. So may we suggest our part, the importance of the Iraqi Central Bank study the issue of establishing a similar bank of the Iraqi Bank of Commerce It means operations open letters of credit to the private sector and the financing of trade in a manner similar to the Mai PEOPLE him TBI in foreign trade financing to the government. And perhaps the head of the proposed shift from the use of Central Bank foreign direct window to convert to the use of external credits methods Bank (proposed) gradually to replace the Central Bank of Iraq window Balyatea direct current.

(*) Economic adviser to Iraqi Prime Minister

(**) Research is published on the web site Alaguetsadi Iraqis on 01/28/2016

(***) Comments sent by Dr. Mirza on 01/30/2016 in to a group of economists and petroleum, which read as follows:

"I thank Professor / conciliator Hassan Mahmoud, the seriousness in his paper put information on the banking landscape in Iraq and discuss the most important issues and policies and banking institutions. He used his experience and knowledge of the long-term and rich by working at the central bank and banks, private banking (more than half a century!), To provide a realistic picture of what the status of the banking sector in Iraq. In addition, it analyzes the causes of underdevelopment and presents what he sees of recommendations to overcome the obstacles. Knowing that he did not lose sight of the size of these constraints and the reasons for the economic and political interests and fed.

Whether one agreed or disagreed with some of the provisions of the analysis and recommendations, the professor raises conciliator appropriate and objective discussion of this vital sector of fact and recommendations hand background. And observing the recommendations to be discussed seriously by decision-makers and by his fellow professionals and those interested in Bachirvh banking affairs in general and Iraq in economic affairs.

With thanks again.

Ali Mirza "

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