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06-11-2013, 04:47 PM
Government guarantees to encourage private banks to finance investment projects (http://alsabaah.iq/ArticleShow.aspx?ID=48084)

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11/6/13 12: 00 am

Al-Saadi called for sound credit policy to employ surplus

Baghdad Yasser Metwally

The banking sector plays a prominent role in supporting economic development programmes and plans and financial markets as one of the most important sources of funding for the implementation of projects at the macroeconomic level, as well as being one of the most important sources of financing in developing countries, as the source of the profits of these projects and securities markets.

This vision developed by the Economist and President of JSC Dr. Abdul-Razzaq Al-Saadi, an introduction to specialized study this aspect we found important "he recounted about the Iraqi banking system and its role in the crisis in the banking sector and which prevent the resurrection of this role.

And the first question which homntalk the dialogue summarizes how to mobilize financial resources held by banks and forward towards stimulating investment criteria for economic growth?

In this regard see Saadi need intervention of monetary authorities to make important adjustments to the structural entity of banking and credit policies and instruments by making banks capable of creating credit exceeds its cash reserves and paid up capital and deposit cash savings head resulting from current or savings into fixed thus ensuring transmission of banking deposits to loans to assist owners or investors for loans.

Al-Saadi to say goes and bank credit has played a historic role as funder requirements while operating capital continued to convert most of the fixed capital of individual savings and retained earnings for the business projects through self-financing.

And these ideas in time of approaching a Bank for banks to raise private capital each bank to two hundred and fifty billion dinars to finish at the end of June for the purpose of the contribution of these banks to finance projects to meet the huge demand in the start-up phase of reconstruction.

But these banks are looking for guarantees the repayment of loans, how to achieve it?

Saadi believes need to study this thing between the Central Bank as the sectoral responsibility and preservation of any emergency under the Constitution and requires banks to raise the ceiling and the law guarantees the guarantor to the rights of both sides of the equation, and that's what you're looking for banks to engage in such secured credit.

He was the Executive Director of the Association of private banks in Iraq Abdul Aziz Hassoun had raised a few days ago on cash surpluses to private banks and the possibility of its investment but are looking for Government guarantees to launched and requires legislation.

Permission of convergent goals and ideas with a willingness to contest such an experience which has achieved great successes in their economies and situations similar to put Iraq and the results on the ground are developed and emerging.
In the midst of this vision underscores a major problem faced by private banks as a result of fallout from the recent Central Bank problem and who tries and gleaned to the fullest due to the importance of preserving the reputation of banks to their correspondents and global banks they deal with and required addressing things quietly and accurately to return banks to perform its role in development.

On the question about the reasons for the declining performance of the banking sector Al-Saadi said the reason behind this decline is a decline in Bank lending to finance business projects are short-term in nature, to the detriment of long-term investment projects based on the principle of profit fast forgetting the importance of the continuity of banking activity in financing investment projects and profits that might result as well as the accompanying development of such long-term investments and access to global banks refineries in terms of funding and investments other than contributing to programmes Development.

Saadi noted the seriousness of the bank credit policy is not clear and the contrast between the monetary and fiscal policies, exchange rate fluctuations and leads to avoid investors employ their savings and reduce the attractiveness of investment and make it more difficult for savers to take investment decisions on the scientific bases of this savings is in bank deposits, despite almakhzealiha.

Al-Saadi criticised some banking legislation limiting the activities of investment banking and brokerage on stock markets in anticipation of market risk and volatility in the prices of securities held by banks, pointing out the impact on liquidity and credit, said: generally remains the role of the banking system in the national economy specific guide that banking still traditional and dominate their activities because of gmodalkwanin and the low quality of professional competencies and of the challenges facing the banking industry overall has been summarized by Saadi exclusively traditional business Deposit and withdraw, financing and lending and discount and characterized as short-term