Deposit and Loan Guarantee Institutions and it’s Role in Restoring Confidence in the Iraqi Banking Sector

Abstract

Pacing from the part of deposits and loans in supporting banking stability, any peril that threatens this part constitutes direct trouble to the banking system. Thus, should develop the mechanisms to cover and guarantee the rights of depositors (deposit guarantee), and mechanisms to cover banks from remitment of bank credit and cover them from ruin and ruin through the establishment of an institution guaranteeing loans, which represents an abecedarian demand to guarantee and stabilize the banking system and restore lost Confidence in the Iraqi banking system. Consequently, the exploration problem surfaced from a set of questions: Do deposit and loan guarantee institutions lead to the banking system's stability? Does this affect the degree of stability of deposits and attract further deposits, especially since deposits within the banking system are (23), while there's a chance (77) of the financial mass outside the banking system? As well as the question, will the bank credit increase after the loan institution guarantees this credit? Therefore, cranking the Deposit Guarantee Law and approving the Loan Guarantee Law will contribute to the anticipated part in restoring Confidence in the Iraqi banking system? It represents the fundamental problem of exploration, primarily since the Deposit Law, despite its blessing, has not been enforced.