Stability and confidence in the banking system

Author: Dr. Appearance of Mohammed Saleh

31/8/2017 12:00 am

 Still, talk about the manifestations of compactness takes various dimensions in Iraq. Between the coinage in kind, such as gold or gold occupied (Almkhshalat) jewelry and precious valuables and the compactness of the Iraqi dinar, which accounts for about 77 percent of the currency exported outside the Central Bank of Iraq as well as foreign currency.

The national economy is losing one of its strength factors by shifting its savings, which support the cycles of income and production, to leakage in the income cycle or weaken the chances of production and economic activity.

The demand for money or forms of money-like wealth for hedging purposes only, or its designation as a term, is also applied to the request for criticism for purposes of theoretical intervention and assessment of the role of risk in the behavior of monetary demand.

Accordingly, the history of Iraqi banking during the last century has witnessed the phenomena of exchanging gold in paper currency by placing gold as a hostage at the goldsmiths or moneylenders for interest.

 The demand for money here helps ensure that gold is taken out of cash leaks to the spending cycle and economic activity, but market instruments are illegal. Demand for cash is for transaction purposes, but income cycles are not necessarily complete and do not lead to real economic equilibrium.

The modern economic history of Iraq, especially in the sixties of the last century witnessed the start of the establishment of a government bank called the Mortgage Bank as a legal and legal alternative to the phenomenon of moneylenders and the whole illegal market in the provision of cash loans secured by gold; the Bank of mortgages in the provision of cash loans for the retention of gold that is in the possession of the borrower Until the maturity date of the loan or repayment against interest charged by the Mortgage Bank to cover the operating costs and part of the risk of fluctuating the value of the same security from the liquid or gold coins occupied.

But unfortunately the bank canceled the bank in the early seventies of the last century for reasons I do not really know. However, the banks remained in a semi-banking relationship with customers in the provision of some services.

 However, bank funds or personal bank vaults remained available to citizens and are available for use within each bank, especially the government, particularly the Rafidain and Rashid banks.

 Citizens can keep their losses Gold and its valuable assets and important documents in those secure accommodation for a wage and a 100% security rate for a monthly or annual fee is cut.

 The absence of this safe service cut off one of the bonds between the citizen and the bank as an entity that preserves the wealth of society and creates a climate of direct links between individuals.
And banks.

In conclusion, I call on the Central Bank of Iraq to proceed with the study of granting a license to an Iraqi bank for mortgages (mortgage gold occupied for monetary money), which strengthens the bank credit and turns the quasi-fortified wealth to a guarantor force in generating demand for money for the purposes of transactions and support economic activity, and promised one of the channels In addition to maximizing the atmosphere of trust between the banks and the deity to receive their gold and other valuable valuables in safe vaults at the banks for affordable wages, stressing the importance of starting the activity of the Daman Company. Deposits that the public is looking for soon to check on its bank deposit from the risks of banks' exposure and failures.

 In addition, it reduces the demand for liquid cash, which is an unstable function and is highly correlated with the uncertainty of individuals asking for cash in liquid form (Quarantine) or quasi-money, and to prevent the entry of the cycle of income and deprive the cycle of economic activity to fuel and active material money.

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