دور البنك المركزي في الرقابة على المصارف التجارية في العراق

The role of the Central Bank in supervising commercial banks in Iraq

Abstract

Banking supervision is an essential tool for achieving economic stability and building an efficient and effective banking sector, which results in reducing banking risks and managing them effectively, as well as reducing the negative effects that affect the performance of banks. Supervision is also a means to help banks correct their mistakes in a timely manner, and guide them to ways to avoid them in the future to reach a sound banking system.
The aim of the research is to shed light on the role of the Central Bank of Iraq in achieving banking stability, and to identify how the Central Bank exercises supervision over commercial banks, and to understand the mechanisms of supervisory intervention through laws and legislation during a specific period of time.
As for the research problem, it is represented in the extent of the stability of the banking sector in Iraq under the supervision of the Central Bank, and the ability of this sector to achieve financial and monetary stability and continuity in providing financial intermediation services under that supervision. The research was based on several hypotheses, the most important of which is that the application of modern banking supervision mechanisms by the Central Bank of Iraq has positively affected the safety and stability of the Iraqi banking system, and the research followed the analytical approach.
The research reached several results, including: the low banking density in Iraq compared to the standard banking density, which led to weak banking awareness, and sound banking supervision is an essential condition for the continuity of banking activity, which consists of office supervision and field supervision, and finally the incompatibility of the services provided by Iraqi banks in terms of number and type, and also in terms of procedures and speed of provision with the requirements of the market economy, in addition to their weakness compared to the number and type of services provided by Arab and international banks. The research also issued several recommendations, including: working to enhance banking governance by applying the standards stipulated in the Corporate Governance Guide issued by the Central Bank, as it works to increase the degree of disclosure and transparency in the financial statements, and this contributes to revealing the weaknesses that reduce the efficiency of banks’ performance, and also linking compliance employees to the Central Bank of Iraq so that they are independent of bank administrations, as this maximizes their freedom to submit reports transparently.