Expert: economic development not only advanced banking system

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Expert: economic development not only advanced banking system

 

 

       

11/28/2015 0:00 

Calls for strengthening its role in the construction 
of Baghdad Shokran Fatlawi 
said banking expert that economic development can not be finalized until an advanced banking system, attributing the weaknesses in the Iraqi banking sector are structural, regulatory, environmental, suggesting at the same time an action plan to address the negative aspects of the sector in order to change its structure, including lead to the advancement of his abilities and develop tactics for its contribution to GDP growth and strengthen its role in rebuilding the country's efforts. 
He said banking expert conciliator Hasan Mahmud that the banking sector current Bhacleth and the whole of its capital traditional ways of his current non Ghaderaly the advancement of the functions of economic development unless insists to address its problems President, returned him Balsgar and marginal as not to exceed rate of 1.5 percent in gross domestic product, GDP. 
He added that the State-owned banks dominate the ranges between 85-90 percent of the sector's assets and deposits of the public, which hinders the development of private banks. 
and between Mahmoud said the annual report of financial stability for the year 2013 indicates that the sector's assets at the end of the year amounted to a total of 208.8 trillion dinars, or about 77.4 percent of GDP, which is estimated by the same report estimated 269.6 trillion dinars amounted to government banks share of which 187.7 trillion dinars, or about 90 percent in the private sector share of 21.1 Trliuna any amounted to about 10 percent only. 
He noted that the banking business did not take root has so far literature and other collateral such as studying the feasibility and tables of cash flows or remittances right, especially as the economic projects, the new ones, that were not available real estate collateral required by banks to extend credit and reached by the parties, the lender and the borrower, to a standstill, adding that he did not debate the legality of the request for any bank guarantees to facilitate the cash was Aotahdia. He noted that most of the banks are going to two destinations, the first that maintains high enough capital beyond the standard controls «Basel» ratios and instructions of the Central Bank of Iraq up to   
(8 percent and 12 percent, respectively), according to issued by the Central Bank Financial Stability Report which reflects the nature of the investments these banks and a preference for investment in low-risk instruments, notably the treasury transfers or short-term deposits with the Central Bank. He said the other trend is the reservation in bank credit granted because of the risks as a result of the present situation which leads to depriving the national economy from the practice of banks of the activity is due out profits. 
As the Financial Stability Report that the adequacy of capital for private banks at the end of 2013 accounted for 30 percent, but he also The situation is different in state banks, amounting to 15 percent of the Rasheed Bank and 30 percent of the Iraqi Bank of Commerce, but landed only 2 percent of the Rafidain Bank which is less than the minimum due, pointing to the retention of private banks enough high capital is not inconsistent with the fact that the collapse of two banks and the reluctance of banks. 
He suggested Mahmoud the necessity of activating the rules of governance needed to monitor the performance of boards of directors and executive departments and verification of compliance with laws, regulations and instructions Governance, noting that the most important fundamentals of governance separation between the responsibilities of the Board of Directors and Chief Executive Officer should not be any member of the Board of Directors executive powers, as well as the need for the presence of structures regulatory and administrative powers and responsibilities to identify and clarity of insurance and the existence of effective frameworks for control available to them. 
It also pointed to the need to disseminate banking risk culture and ways of evaluation and management and ways to mitigate or reduce the attendant need to get rid of the banking lack of two institutions of chock institutions which guarantee deposits Foundation, the loan guarantee and credit accompanied by the application of laws and regulations, instructions and application of best practices Best Practices known by bankers professionals, provided that monitors the implementation of pre-seasoned and immune system against corruption and impose deterrent to offending banks penalties.   
modern concluding his reference to the need to go to the gradual privatization of the creeping of a public company to company mixed contribution and then to a private joint stock company and build on what is known in the world of business and finance for Due Diligence)), a process that involves a great effort vested in company accounts aimed at evaluating the assets of the Foundation offered for sale and liabilities in whole or in part to get to the real value of the fair.

 

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