The controversy over foreign banks’ acquisition of the “Iraqi Dollar Auction”.. A ​​comprehensive explanation of the reasons

 The controversy over foreign banks’ acquisition of the “Iraqi Dollar Auction”.. A ​​comprehensive explanation of the reasons

2024-07-14

The controversy over foreign banks acquisition of the Iraqi Dollar Auction.. A ​​comprehensive explanation of the reasonsAlsumaria News – Economy

The researcher in banking and economic affairs, Mustafa Hantoush, reviewed today, Sunday, the reasons for foreign banks’ acquisition of the largest percentage of shares in some banks inside Iraq and their acquisition of the currency auction as well, as the strengths of these banks are that they are owned by foreign banks capable of opening accounts easily in accordance with the standards of American banks that supply the dollar.

Hantoush told Sumaria News, “Some foreign investors and foreign banks have obtained more than 51% of shares in some banks inside Iraq, despite the fact that the Companies Law prohibits giving the foreign investor more than 49%.”

However, Hantoush reviewed the existence of a “legal loophole” that enabled the Central Bank to grant foreign investors larger percentages than stipulated in the Companies Law, noting that Article 107 of Banking Law 94 of 2004 gives the Central Bank’s Board of Directors the authority to determine the percentage of foreign investor ownership in banks without being bound by general laws.

He considered that this paragraph is not supposed to mean that the percentage should be more than 50%, but rather that it should be less, but the loophole is that the legal article gave absolute authority without addressing that the percentage should be less or more than 49%.

He explained that “there is no granting of a share larger than 50% in the world except in countries where there is a high circulation of funds, considering them bankrupt countries that do not possess wealth that they fear will be controlled by foreign banks.” He explained that

“according to this strategic mistake, foreign banks were given more than 60% of the shares in banks inside Iraq Today, we have begun to observe the fruits of this mistake, when the American side noticed the existence of currency smuggling and trade operations with Iran. Syria and set conditions of compliance, failed Central Bank of Iraq And Iraqi banks by applying the standards or the possibility of opening accounts for Iraqi banks in American banks to achieve control and finance their accounts in dollars.

He pointed out that “when this happened and the arena became empty of Iraqi banks capable of taking on this role, these foreign banks operating in Iraq And through the governors of the central banks of the countries of origin of these banks, they presented themselves as a solution to Washington instead of presenting themselves as a mediator between Iraq And America.”

He stressed that “indeed, American banks relied on these foreign banks operating in Iraq And they opened accounts for them in Citibank And JPMorgan, to their parent banks in other countries, which own the largest part of these banks within Iraq Although these banks are in Iraq Its work does not rise to achieve 5 points in the international standards, but it relied on its parent banks located in other countries.”

Accordingly, Iraq Now I take the dollars he has in the US Federal Reserve, and through them I finance the accounts of these banks that are open in my pocket accounts. Morgan And Citibank From there, the dollar is transferred to the rest of the world for Iraqi traders, and the traders deposit the dinars in Central Bank of Iraq He explained that “Iraqi banks cannot perform this role because they cannot open accounts in Citibank My pocket Morgan “Because it does not have branches in countries that the American banking system trusts, and the Central Bank of Iraq failed to guarantee Iraqi banks against American banks, and succeeded earlier in 5 banks but they only lasted a month and then these banks were punished, and they too were guaranteed by Jordanian banks.”

He stressed that “it is not possible to rely on foreign banks to manage the Iraqi banking system, this model failed in India because of its reliance on the foreign banking system, as the foreign bank gives profits to its parent branches abroad, and does not reinvest the profits here inside Iraq”, calling on the Central Bank to “find a solution to trade with Iran and Syria…and strengthening the Iraqi banking system and guaranteeing it before American banks and opening accounts for Iraqi banks to experiment with American banks.

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