Enhance the economic wealth of financial assets

Last update: Tuesday, June 14, 2016 - 11:30

BAGHDAD - Imad emirate said economic academic d .awwad Fadel said that the relationship between the economy and financial development not only lies in the role of money as a factor in economic growth, but that the country's growth and increase its capabilities productivity lead to increased retention amount greater than the cash liquid for Dechl.wachar Fadel in an interview with «morning» that the search for the largest and liquid financial assets to keep them high Kahiazh economic wealth is greater than the liquid cash, for income, enhances the economic wealth.

He pointed out that the diversification of financial assets and increase their amounts and percentage be a reflection of the diversity of intermediary financial institutions, banking and non-banking, and to meet the needs and tastes of the public and the growing area of ​​banking and the growing trading stocks, bonds and other financial assets.

Fadel said that these factors help reduce the compactness and the influx of more liquid cash in pictures savings to intermediary financial institutions leads to increase the proportion of deposits to the banking income and lower trading cash income speed, as well as increase the assets of banking institutions to total output and to increase the capital base and provide the possibility of employing the largest in the field of loans and investment securities, and thus achieves a kind of correlation between economic growth and financial development.

He stated: supply growth linked to economic growth is the fact that the demand for money increases with economic growth to facilitate market exchange, as it will be needed broader money to exchange for larger goods and services on the market in quantities, require growth in the means of payment.

He pointed out that on the other hand produces economic growth last request was to assets that contribute to reducing the currency relative to the money supply, coupled with the diversification of financial assets and an increase of the total financial assets available in the economy.

And went on Fadel said that the achieved economic in Iraq grow, thanks to the role of the oil sector and its contribution in the formation of GDP, is not commensurate with the development of the financial sector whether in size or in the investment his tools or the financial intermediaries, explaining that the abundance of financial resources is the accumulation a key growth rates rapidly pays and parallel in the sectors of the economy.

As a result of the nature of the circumstances experienced by the country has remained the financial environment irregular financial status and structure can be described Palmtkhalaf as well as the limited confidence of borrowers and commercial banks which represent the core of existing financial intermediaries in the cash market, tinged km from deficiencies in infrastructure, financial products and conduct investment and rules of capitalism and transparency of banking is still elusive.

He concluded Fadel at the conclusion of his speech to say: Thus identified financial and monetary conditions of underdevelopment of financial intermediation services, and has become the underdeveloped banking environment episode of underdeveloped economic environment rings, Lhz did not notice the Iraqi economy improved his banking and consequently the financial to the fact that the banking sector is an influential legal sector in the size and movement the financial sector, making the contribution of the latter adapted to the conditions of the economic delay of attracting a small percentage of private savings to GDP and the flow of weak credit units private activity and focus on achieving a quick profit limited quantity but low risk and high liquidity and credit guarantee more than his quest as an activity rests the process of capital accumulation, and consequently supportive of the development and growth through the development of adequate financial instruments and re-allocated in the most socially productive investment fields.