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Economic calls for banking sector governance to stop the corruption of the currency auction


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Ok, the previous article about the Alak and the CBI, Medi Reza was not the complete article from alaalem.  Iraqi Economist posted the entirety.  I think you will find this very interesting!

 

 

Mehdi Mohammad Reza *: Alalak

- POSTED ON 08/04/2018
He entered us from an unexpected door, it was a surprise.  He is Ali al-Alaq, acting central bank governor.  His entry was dramatic, from a side door, the scene was lacking in applause, or any other effect.  All shook hands, [...]

 He entered us from an unexpected door, it was a surprise. He is Ali al-Alaq, acting central bank governor. His entry was dramatic, from a side door, the scene was lacking in applause, or any other effect . Shook us all, and wiped away all the previous aura . He was witty, contemplative, hoping that his message would reach us easily, maybe he knew we were not well spent, he would say, and we have no capacity for interventions. He was sitting on his right, deputy governor Munther al-Sheikhli, and the director of the administration . I thought myself, loaded with questions, doing my best, I waited until he completed his words, about the achievements of the Central Bank, since taking office. Talked about the importance of the independence of the Central Bank, and monetary stability, and control of inflation. And the most important developments that took place in the bank, the management of foreign reserves, and investment in it, after he developed Kadra for this task, and is now overseeing the process . He also spoke about the central role of supervision and control over the public and private banking sector. His talk about government banks, represented by Rashid and Rafidain, was painful, burdened with the weight of the legacy of the past, which can not be solved, but uprooting it from its roots and liquidating it. I do not think he can do it . He also referred to the private banking sector, which has nothing to do with the fact that the country has 70 banks, which do not have the lowest banks in its work . He said he did not give a single leave to any new bank, except Islamic banks, embarrassed by the parliament, where he voted for it . He also spoke proudly about the central bank's pre-emptive control of private banks in the event of any imbalance in which personal control and technical techniques interfere . One of the worst we have heard: Iraq's bank dealers are only 11 percent of Iraqis. This suggests that the failure of citizens' trust in banks is justified by a culture of society (Iraqi society tends to put money in its hands casually), perhaps . Also referred to the bank lending industrial and agricultural projects, about $ 6 million and a half, and this was a successful achievement, it was not quite clear. How he spent this money, and what his influence actually was . Most importantly, the rise in reserves in the central bank does not depend on the bank, and probably on the finance ministry itself . He talked about how to sell the dollar at the auction of the currency, which is as follows: Finance receives oil revenues in dollars, giving it to the Central Bank, in order to sell them, because the bank is more knowledgeable, in the process of selling, and the association of banks and drainage and transfer companies. This makes it easy to sell. Since it is the finance that determines the need for sale, for the purpose of paying salaries, for example, in dinars, and the budget of the ministries as well, so the story of the sale and quantity, determined by the Ministry of Finance, not the Central Bank . He explained to us recently, that there is no alternative to the currency auction, but the bank takes the dollar, and print a dinar, which means a disaster in inflation . Thus, even the question of lower reserve is not directed to the central, but to the financial. "We need more information here on the subject of reserves ." The man ended up talking and began to wait for the questions of his guests. The eldest, Adnan Hussain, began to ask questions, obviously both public and non-specialized. The others spoke as well, and it was quite clear that no one specialized in economics . Have we been summoned for this reason, being non-specialists? But what does a man do? How his message will reach the media, and then the public . The truth is not the blame, but the blame here is all of us, the owners of the newspapers. I am one of them. I do not have a single economic journalist .

 

When the questions came to me, I first thanked him for the kind invitation, and then told him, frankly, that we do not have a competent economic press. And the reason for us. Yes, we have academics and important experts, so I thought, before meeting the invitation, to contact some experts to ask them questions.

 

My question is that the questions sent to me by one of the economists were clear-cut and clearly biased to the former governor. All the questions revolve around him. And that the current governor has put great pressure on him when he was a director in the Council of Ministers, and that he was holding hearings similar to the trials of the former governor, has faded into these eternal conflicts.

 

I asked him one question about the former governor. I said: According to our information, your grandfather was one of the critics of monetary policy, especially the currency auction, during the period of Sinan al-Shabibi and the appearance of Muhammad Saleh. What are the fundamental changes that you made during your work on the currency auction, To the currency window?

 

Another question: We also heard that during your tenure as Secretary-General of the Council of Ministers, you were in serious disagreement with the former governor, and you tried to subject the Central Bank administration under the supervision of the Council of Ministers, but Shabibi rejected it strongly and insisted on the independence of the bank.

I also asked him: Why did you stop the announcement of the demand to buy the currency, and you limited the amount of sales. This causes a shortage of analysts and observers, in the knowledge of supply and demand, study the difference, and find solutions.

I also asked him:

You are happy with the convergence between the parallel price of the dollar and the official price. Will this continue in the future? till when?

My last question was about the bank deposit guarantee company to protect citizens' deposits?

When the answer began, he was clearly distressed by the accusation that he was at odds with the former governor, and stressed that there was no such disagreement at all. But that he is still in contact with Shabibi, and that now he is helping him to complete the treatment of his retirement. And he went to integrity himself, condemning a book (did not clarify content), was directed to Shabibi .. And arrested.

While mentioning the only dispute between them, was related to the subject of money laundering, when Shabibi refused to intervene and indicates that it is the responsibility of security and not the bank, and that he was very interested in any relationship to the subject of money laundering, and was able to limit it during the period enjoyed by the management of the bank .. Enjoying this achievement.

He addressed the other questions with brief answers, and I am not clear to them, as is the case with the other guest's questions, which seemed unclear to me, and their answers are very similar.

We finished more than two hours later, received simple gifts of high moral value, and then went to a lunch at the bank cafeteria, which the central bank gave an investment for two smart girls as it appeared in the arrangement. I think the Lebanese touch was overwhelming, because the visual taste of the place was outstanding, and the best was the seafood meal .

I sat in front of the governor, who began to refuse to diversify the food, just to the plate in front of him. We talked about kitchens in the world. He had a lovely taste of choice and talk about food, and his love for him, despite his thickening.

Reminded me, once, the late Ahmed Mahanna, that he did not like eating for a decent! I do not know how true it is, but experience has shown me that.

The truth was that the humility of the relations was very striking, and there were remnants of dignity and luxury in the days of his youth, a smile above his cheeks, and consistency in the colors of his clothes, carefully studied.

After we drank tea, which he did not like being ( teabags ), he quietly went left, and we went right.

And so ended my first meeting with the ..

 

 

Source: Al-Alam Al-Baghdadiya newspaper, 1941 and 1942, 8/4/2018 and 9/4/2018

http://iraqieconomists.net/ar/2018/04/08/مهدي-محمد-رضا-العلاق/

 

 

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1 hour ago, 10 YEARS LATER said:

 

Right you are OT ! End the Bloody Thing for gods sake. I've lost track of exactly how long they've been beating this  :deadhorse: - perhaps well over a year . . . at the very least, yes ?

The very least Family, I'm at the point where I need to start an auction, auctioning off trash as antiquities to the the steadily increasing number of Tom Fools out here lol

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Comments to Mahdi Reza Article
 
ien-150x150.pngLamp of perfection
Posted April 9th, 2018 at 4:19 pm

The implications of insurance in the light of remarks by the Governor of the Central Bank of Iraq

I read the report of Mr. Mahdi Mohammad Reza on the press meeting with the Governor of the Central Bank of Iraq did not leave me compare some of what was written about the bank and banks with what is in the insurance sector, I would like to present as follows:

1 - Central Bank and supervision and control of the banking sector government and private, and the role of the Insurance Bureau

I do not know if the central bank has in the past had a role in supervising and controlling insurance activity. In the 1970s and until the 1980s, the control of insurance activity was the function of the General Organization for Insurance, and after its cancellation by a decision of the Revolutionary Command Council in April 1987, the supervision became the responsibility of the Insurance Controller in the Ministry of Finance until the Regulation of Insurance Acts 2005 was issued, .

It seems that there is a new round about the Insurance Bureau. I learned from Professor Abdul Baki Rida that he submitted a proposal to one of the prime minister's advisers to turn the bureau into a public department linked to the Ministry of Finance. " Thirty days from the date of its entry into force on 6 March 2005. "

She wondered if it was thought to link such a Directorate with the Central Bank of Iraq, especially that insurance and banking are important elements in the financial sector.

I had sent a copy of the draft Jordanian Insurance Regulatory Act to Professor Abdul Baqi, knowing the current law in Jordan and his interest in it for years, with a short comment that the adoption of this project and its enactment as a law and its proper application will lead to "raising the level of insurance activity in Jordan Insurance away from family and tribal interests. "She said that some of the articles of this Jordanian project could be used to reformulate the Insurance Regulatory Act No. 10 of 2005. For example, Article 6, which states:

"It is not permissible to insure the liability and movable and immovable property in the Kingdom with an insurance company outside the Kingdom. No entity in the Kingdom may make any insurance for its employees or its customers at an insurance company outside the Kingdom."

I hope the attention of the Insurance Bureau to the Jordanian draft law when the opportunity arises. It seems that some of the Prime Minister's advisers interested in insurance, as taught by Mr. Abdel-Baqi, support and appreciate the idea contained in the Jordanian Insurance Bill to transfer the task of organizing and controlling the insurance business to the Central Bank as insurance activity is classified as a financial activity.

I do not know if the idea of making the oversight of insurance from the functions of the Central Bank of Iraq has appeared to the public and discussed with those concerned on this subject (insurance companies, the Insurance Bureau, the Iraqi Insurance Association, the Central Bank).

I tend to subject the insurance activity of the Central Bank of Iraq as this activity and banking activity, together with other institutions, the financial sector. Britain has followed this trend by enacting the 2012 Financial Services Act and setting up the Prudential Regulatory Authority (PRA) as a branch of the Bank of England. It supervises banks, insurance companies, credit unions, insurance companies and major investment companies. In the past, the supervisory function was a function of the British Department of Trade.

One of the features of such censorship is that it is proactive control. And the Central Bank of Iraq exercise such control as stated in the words of the Governor of the Bank:

[The governor] also spoke proudly about the central bank's proactive control of private banks in the event of any imbalance in which personal control and technical techniques interfere. "

This type of oversight is currently lacking at the Iraqi Insurance Board (in any case, the practice of censorship by the SAI is not as it should be).

2 - the number of private banks and private insurance companies

Mr. Mahdi Mohammad Reza, quoting the Governor of the Central Bank:

"He also referred to the private banking sector, which has nothing to do with having 70 banks in the country, which does not have the lowest bank assets in its business. He said I did not give a single leave to any new bank, except the Islamic banks, embarrassed by the parliament, where he voted for it. "

This is a dangerous statement. 70 banks "do not have the minimum bank components in their work," which are licensed by the Central Bank, and yet do work! How does this fit with the central supervisory role?

Then, how does the central bank embarrass (pressure, blackmail, or what and who has exercised this embarrassment) from parliament to grant leave to Islamic banks? Where are the criteria for granting leave? How does the governor's vote to grant leave, under pressure or embarrassment, coincide with the supposed independence of the central bank? Does Islamic banks have a relationship with the governor's position?

If the banking sector suffers from a deluge in the number of banks, the insurance sector is also suffering from a similar delusion as there are more than thirty insurance companies licensed by the Bureau of Insurance. There are insurance companies, some like insurance shops, have not yet met the requirement of the capital of the company, yet they are engaged in insurance!

Note that the Iraqi insurance market suffers from the existence of such a large number of insurance companies, which is not necessary, in proportion to the volume of insurance premiums written. Effective demand for insurance is weak for the absence of awareness of the importance of insurance as a mechanism to hedge against the negative effects of risks to individuals and companies. (2) the low income of large segments of the poor to the extent of limiting their thinking now and in the provision of daily sustenance.

Of the market saturation, in terms of the number of insurance companies and the capacity available to them, is the lack of competition between them, and running behind the subscription of insurance documents at any price (lowest prices) - the subscription without the application of technical standards in the evaluation of the place of insurance and student insurance and previous experience and the adequacy of the amount Insurance ... etc. Where is the insurance bureau of this situation?

Why, then, does the Insurance Authority authorize more insurance companies? Is it a desire to obtain licensing fees or is it an expression of the absence of a national economic vision for the role of insurance?

3. Dealers with banks and with insurance companies

"One of the worst we have heard: The dealers with banks in Iraq, is only 11 percent of Iraqis. This suggests the failure of citizens' confidence in banks, which is justified by a culture of society (Iraqi society tends to put its money in its hands casually) "

There are no statistics on the number of dealers with insurance companies (policyholders) attributable to the population. (Except for those subject to the Compulsory Motor Vehicle Liability Insurance Act of 1980 and its amendments) (which applies to all owners of a car, insurance companies do not issue insurance policies because liability is assumed by force of law and the premium is paid when fuel is supplied) Insurance may be close to the rate of dealing with banks, but I doubt that I see it less than this ratio. It may help us who knows better than we do.

Failure to win citizens' trust in banks is offset by a similar failure in the insurance sector. The weakness of the culture of dealing with banks (because of the traditions of dealing with criticism and the tendency of individuals to accumulate their money) finds resonance in the weakness of the culture of dealing with insurance companies (because of the lack of rationality of the management of the future, the rule of dependence and written destiny, and low incomes of large segments of citizens so that thinking about something called insurance Becomes a luxury).

The weakness of banking and insurance is only a part of the weakness and distortion of other "institutions", political and economic, in a climate characterized by corruption. Read any daily newspaper and discover the size and types of corruption prevailing at the national and local level and at the level of the Kurdistan Region - Iraq, and the statements of ministers and deputies and other officials on it as if they are not a party to it.

4. Industrial and agricultural project loans

"[The governor] also mentioned the bank lending about $ 6 million to the industrial and agricultural projects, which was a good achievement," he said. How it was spent, and what it actually did. "

Indeed, how about $ 6 million was disbursed from industrial and agricultural project loans, and what effect it actually had on the use of loans, on labor, on gross domestic product and on the purchase of insurance protection. To follow up on some aspects of the subject, see the following links in the Iraqi Economists Network:

Kamal Kamal, "Central Bank Program for Industrial and Agricultural Loans, Housing and Insurance Status" 
http://iraqieconomists.net/ar/2015/09/08/%d9%85%d8%b5%d8%a8%d8%a7%d8%ad -% d9% 83% d9% 85% d8% a7% d9% 84% d8% a8% d8% b8% d9% 86% d8% a7% 84% d8% a8% d9% 86% d9% 83% d8% a7% d9% 84% d9% 85% d8% b1% d9% 83% d8% b2% d9% 84% d9% 82% d8% b1% d9% 88 /

Farouk Younis, Kamel Al-Adadh, Mesbah Kamal, "Comments and Letters on Agricultural Insurance" 
http://iraqieconomists.net/ar/2018/04/03/%d9%81%d8%a7%d8%b1%d9%88%d9 % 8% d9% 8% d9% d8% d8% d8% d8% d8% d8% d8% d8% d8% d8% a8% d9% 85% d9% 84% d8% a7% d9 84% d8% b8% d8% b6% d8% a7% d8% b8% d8% 8% d9% 85% d8% b8% d8% a8% d8% a7% d8% ad-% d9% 83% d9% 85% d8% a7% d9% 84% d8% aa% d8% b9 /

Can we expand the question of Mr. Mahdi Mohammad Reza or say a part of it: Has the Central Bank evaluated the loan project and its preliminary results? Who are the beneficiaries? And we add to ask the Iraqi Insurance Association or the pillars of insurance: Did you have a position of the draft loans of the Central Bank? Have you offered your services to the Central? Have you secured any of these loans?

5. Specialized economic and insurance journalism

"The man ended up talking to him and began to wait for the questions of his guests. The eldest, Adnan Hussain, began to ask questions, obviously both public and non-specialized. The others spoke as well, and it was quite clear that no one specialized in economics. Have we been summoned for this reason, being non-specialists? But what does a man do? How his message will reach the media, and then the public. The truth is not the blame, but the blame here is all of us, the owners of the newspapers. I am one of them. I do not have a single economic journalist.

When the questions came to me, I first thanked him for the kind invitation, and then told him, frankly, that we do not have a competent economic press. And the reason for us. Yes, we have academics and important experts, so I thought, before I got the invitation, that I would call some experts to ask questions. "

I apologize to the readers for this long quote but I see it important because it is on a subject worthy of reflection: the absence of the competent economic press and specialized journalists. Mr. Mahdi Mohammad Reza did well by reminding us of it.

What Mr. Reda says about the economic press applies to the insurance press. Since the end of the 1980s, the Insurance Insurance Bulletin (issued by the General Organization of Insurance) has not issued a paper or electronic insurance magazine (I tried to close this gap, even if only slightly, by launching two blogs: the Iraqi Insurance Journal and the Iraqi Insurance Observatory) Paper or electronic document issued by the Iraqi Insurance Association - the official representative of private and public insurance companies. (Years ago, I was offered the need to issue an insurance magazine and I was prepared to help without charge, but the issue was on a rack that the company might not be able to reach now).

As for the Iraqi press and journalists dealing with the issue of insurance is poor. I have written about it in the past (unfortunately I did not go to publishing sites). His colleague Marwan Hashim Al-Qasab wrote an important article entitled "The Insurance and Journalism Sector, Iraqi Insurance Magazine 
http://misbahkamal.blogspot.co.uk/2009/12/httpmisbahkamal.html

I may find excuses for journalists and journalists for their weak handling of the insurance establishment because they do not seem to be an important element of the national economy. Even Iraqi economists, few of them, do not care about insurance. But how do we interpret the shortage in the competent economic press? I hope that those concerned, including Mr. Mehdi Mohammad Reza, will discuss this issue.

All thanks to Mr. Reza for his frankness and humility in conveying the meeting with the Governor of the Central Bank of Iraq.

Lamp of Kamal 
9 April 2018

http://iraqieconomists.net/ar/2018/04/08/مهدي-محمد-رضا-العلاق/

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14 hours ago, Butifldrm said:

Another question: We also heard that during your tenure as Secretary-General of the Council of Ministers, you were in serious disagreement with the former governor, and you tried to subject the Central Bank administration under the supervision of the Council of Ministers, but Shabibi rejected it strongly and insisted on the independence of the bank.

It’s all rhetoric with both the questions and answers of these articles.... but I will never be a fan of Alak. Because he alone can hit  the RV button without answering to anyone. I see the pressure on him now, and instead of action he responds with a question and answer session... hopefully he will realize soon that his country cannot be put off much longer. Unless I’m mistaken, his position is not an elected official, but a placed position....  imho

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22 hours ago, Freedomwish said:

 

Love how ya' preaching it brother Laid back, PREACH ON!!! :praying::twothumbs: 

 

 

Now, I can't get this tune out of my head lmao :facepalm1::lol:

Freedomwish,  I'm amazed with all the progress in the CBI:twothumbs:

20 hours ago, MEP01 said:

I thought we were suppose to be on the edge of our seats.... and not laid back... Has it changed?

MEP01, The CBI is moving forward like never before, I think is a good reason to be on the edge of our seats. 

They are getting everything in order to go international with an international recognize currency.

 

Go CBI

Go new monetary policy 

Go RV

Go $1:1

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3 hours ago, Laid Back said:

Freedomwish,  I'm amazed with all the progress in the CBI:twothumbs:

MEP01, The CBI is moving forward like never before, I think is a good reason to be on the edge of our seats. 

They are getting everything in order to go international with an international recognize currency.

 

Go CBI

Go new monetary policy 

Go RV

Go $1:1

I like they made some giant steps forward this year.  :twothumbs:

 

Afternoon LB, trust you are doing well.  :twothumbs:

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11 hours ago, Laid Back said:

Freedomwish,  I'm amazed with all the progress in the CBI:twothumbs:

MEP01, The CBI is moving forward like never before, I think is a good reason to be on the edge of our seats. 

They are getting everything in order to go international with an international recognize currency.

 

Go CBI

Go new monetary policy 

Go RV

Go $1:1

Careful, sitting on the edge of a hammock isn’t a safe practice. 

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  • 2 weeks later...

economic

Parliamentary economic: precautionary measures of the Central Bank stopped wasting large sums

14:17 - 25/04/2018

0

  %D8%AF%D9%88%D9%84%D8%A7%D8%B1-696x435.jpg

Information / Baghdad ..

The Parliamentary Investment and Economic Committee attributed Wednesday the decline in the exchange rate of the dollar against the dinar in the local markets to the security stability and the rise in international oil prices, pointing out that the precautionary measures taken by the Central Bank on the currency auction stopped the waste of large amounts.

 Najeeb Najib, a member of the committee, said in a statement that "the rise in oil prices and the increase in foreign exchange reserves at the Central Bank, as well as the end of the war on the criminal and security stability is the most important factors stabilizing the dollar exchange against the dinar."

 "The precautionary measures taken by the Central Bank in cooperation with international regulators on the transparency of the auction of currency and control of funds stopped the waste of large amounts were going in favor of the senior corrupt."

"The Central Bank of Iraq set the official exchange rate of 1200 dinars per dollar during the budget and if the rise will bear the state additional financial burdens can not be easily compensated." Ending / 25 d

https://www.almaalomah.com/2018/04/25/303948/

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