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DINAR REVALUATION UPDATE: Impact of the Basel D-SIB Framework on Iraq's Banking System in 2024, 24 AUGUST

 Impact of the Basel D-SIB Framework on Iraq's Banking System in 2024

The Basel D-SIB (Domestic Systemically Important Banks) framework, published by the Basel Committee on Banking Supervision in October 2012, has been instrumental in strengthening the resilience of domestic banking systems worldwide. 

 As of 2024, Iraq has taken significant steps to align its banking sector with this framework, enhancing the loss absorbency capacity of its banks beyond the requirements set by Basel III. 

Enhancing Loss Absorbency and Risk Management

Iraq's banking system has undergone reclassification to better absorb shocks caused by economic failures. 

 This reclassification involves the adoption of stringent measures to ensure banks have sufficient capital and liquidity to support all risks in their business operations. 

Implementation of Basel Framework Pillar 

In June 2024, a mission was organized to strengthen the Central Bank of Iraq (CBI) supervisors' capacity in Basel Framework Pillar 2. 

 This pillar focuses on the supervisory review process (SRP) and internal capital adequacy assessment process (ICAAP). 

 The mission aimed to enhance understanding and implementation strategies for these components. 

Treasury Single Account (TSA) Implementation

Iraq has also progressed in implementing the Treasury Single Account (TSA). 

 The third workshop on advancing TSA implementation was held in July 2024, with core members from the TSA Implementation Committee actively engaged in discussions and planning. 

 Actions agreed upon include advancing the TSA design, developing a database for TSA bank accounts, and designing portals for data collection. 

Impact on Currency and Global Banking Measures

Iraq's measures to reclassify its banking system indicate its preparedness to align with global banking stress measures. 

 While the immediate impact on currency reclassification is not explicitly disclosed, these steps signal a move towards greater financial stability and international compliance. 

Conclusion

Iraq's adoption of the Basel D-SIB framework in 2024 reflects its commitment to enhancing the resilience of its banking system and aligning with global financial standards. 

Through the implementation of Basel Framework Pillar 2 and the TSA, Iraq is positioning its financial sector to withstand economic shocks and participate effectively in the global economy. 

LATEST FROM GOLDILOCKS, 24 AUGUST

 GOLDILOCKS

A delegation from the Central Bank of Iraq travels to the United States of America to resume negotiations on the banking sector.

A source familiar with the Economy News told “Economy News” that a delegation from the Central Bank of Iraq will start its negotiations with the US side on the current 26th of Aug, in America.

He added that the central bank has moved to sign a contract with Oliver Wyman International to present a plan on reforming the private banking sector, over the next six months.

He pointed out that the plan proposed to be submitted includes the merger of some banks or the cancellation of the license of some banks.

https://search4dinar.wordpress.com/2024/08/24/iraq-and-america-resume-negotiations-on-banking-sector-next-monday/

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In October 2012 the Basel Committee on Banking Supervision published a document on “a framework for dealing with domestic systemically important banks” (the “Basel D-SIB framework”).

This followed the work that had already been done on the policy measures designed for global systemically important banks (“G-SIBs”), to enhance their loss absorbency capacity over and above Basel III requirements."

What does this mean for Iraq? It means that Iraq has reclassified their banking system to absorb the shocks of stress caused by economic failures. 

Iraq has protected their banks with gold and other commodities to ensure their banking system continues to flow into the new economy. 

Does this reclassify their currency? It sure does. We are not being told that it is presently in place just yet. All we know is that they have the means to reclassify their banking system if Global Banking stress measures need to be taken.

© Goldilocks

https://www.iomfsa.im/regulated-sectors/deposit-taking/domestic-systemically-important-banks/

https://cbi.iq/news/view/2649

https://youtu.be/cXADsXdx1oQ?si=IHe9Ato_xtnSeOgS

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Selected Banks in Iraq have reached a new classification. More on this tomorrow.

These banks will be supported no matter what stress is taking place. 

© Goldilocks

https://youtu.be/cXADsXdx1oQ?si=Phm4jVLSYGSfJ4to

IRAQ'S BANKING REFORMS: A NEW DAWN?

DINAR REVALUATION UPDATE : INSIGHTS OF NEW PROGRESS IN IRAQ, 24 AUGUST

INSIGHTS OF NEW PROGRESS IN IRAQ

Iraq's Banking Sector and Private Sector Reforms: Updates and Negotiations

In the latest developments, Iraq and the United States have resumed negotiations on Iraq's banking sector as of August 24, 2024. 1

 These talks, which began on Monday, are aimed at addressing issues related to financial regulation, anti-money laundering measures, and the overall stability of Iraq's financial system. The discussions come on the heels of Iraq's first three-year budget implementation, which included a significant fiscal expansion starting in 2023. 

1

Banking Sector Challenges and Reforms

Corruption and Regulatory Measures

Corruption in Iraq's banking system has been a persistent issue, despite ongoing efforts to reform and strengthen the sector.  2 In response, the Iraqi government has taken decisive action, banning eight local commercial banks from engaging in U.S. dollar transactions to reduce fraud and money laundering. 3 These measures are part of a wider crackdown on illegal currency activities, particularly in relation to neighboring Iran.

Talks with the U.S. Treasury

Iraq is currently in talks with the U.S. Treasury regarding banking and dollar restrictions. 4 The discussions focus on protecting the Iraqi financial system from abuse, which could lead to greater international connectivity for legitimate Iraqi banks through correspondent banking relationships. 3

Economic and Political Context

Iraq's economic and political landscape is complex, with the country's stability undermined by non-democratic forces and powerful elites. 5 The private sector and foreign direct investments remain weak, hampered by political dynamics and corruption. 5

Private Sector Reforms

Over the next six months, Iraq is expected to focus on reforming its private sector. 1 The goal is to advance economic diversification, achieve sustainable growth, and promote private sector-led development. 1 These reforms are crucial for enhancing export capacity, particularly in agricultural items, and for overcoming the challenges posed by widespread corruption and lack of basic services. 5

Global Financial Architecture Reforms

In the broader context, reforms aimed at modernizing the global financial architecture are also underway. 6 These reforms address issues such as global economic governance, climate and development financing, sovereign debt restructuring, global tax architecture, and the global financial safety net. 6

Conclusion

The ongoing negotiations between Iraq and the U.S. on banking sector reforms and the planned private sector reforms over the next six months are pivotal for Iraq's economic future. Addressing corruption, enhancing financial stability, and promoting sustainable growth are critical challenges that Iraq must overcome to achieve long-term economic prosperity.

IRAQI DINAR: GOLD & SILVER CONVERSION IN FOREX TRADING

DINAR REVALUATION UPDATE : Iraqi Dinar's Potential for Gold and Silver Conversion in Forex Trading, 24 AUGUST

 Iraqi Dinar's Potential for Gold and Silver Conversion in Forex Trading

As of August 24, 2024, the Iraqi Dinar (IQD) has been a topic of interest in Forex markets, particularly in relation to its potential for conversion into precious metals like gold and silver. 1

Forex Market and the Iraqi Dinar

The Forex market, being the largest financial market globally, offers opportunities for trading various currencies against each other. The Iraqi Dinar, with its unique dynamics and economic factors, has attracted attention from traders and investors looking to convert it into precious metals.  1

Gold and Silver as Safe Haven Assets

Gold and silver are often considered safe haven assets, especially during economic uncertainties. Converting the Iraqi Dinar into these precious metals can potentially serve as a hedge against inflation and geopolitical risks.  3

Conversion Rates and Market Trends

The conversion rates between the Iraqi Dinar and gold or silver fluctuate based on market trends and economic indicators. As of August 24, 2024, the Forex market reflects these changes, offering opportunities for investors to convert IQD into gold or silver. 1

Impact of Economic Policies

The dual exchange rate system in Iraq, influenced by excessive demand for US dollars internationally, has had implications on the Iraqi Dinar's value and its conversion into precious metals. Economic policies and market conditions play a crucial role in determining the dinar's strength and attractiveness for conversion.  4

Trading Strategies and Considerations

For those interested in converting the Iraqi Dinar into gold or silver through Forex trading, it's essential to monitor market trends, understand the economic factors affecting exchange rates, and develop a strategic approach to trading.