Strengthening economic wealth in financial assets
14/6/2016 12:00 am
Academic Dr Awad said the economic relationship between the economy and financial development lies not in the role of money as a factor in economic growth, but the country's growth and increase production capacity to increase the retention of larger amounts of cash for income.
He virtuously in interview for «morning» to find greater financial assets with high liquidity to keep possession of the economic wealth greater than cash, income, enhances economic wealth.
The diversification of financial assets increase and percentage amounts reflect the diversity of institutions and non-bank financial intermediaries, and cater to the needs and tastes of the audience and the growing area of banking and trading in stocks, bonds and other assets. Finance.
Fadel stressed that these factors help reduce the ketnaz and more liquid cash in the savings picture financial intermediaries thereby increasing the ratio of deposits to the Bank's income and reduce the speed of the circulation of cash income, as well as increasing the assets of banking institutions to aggregate output and increase the capital base and provide greater employability in loans and investments in securities, thus achieving a sort of interdependence between economic growth and financial development.
Fadel said: to link supply growth economic growth is that the demand for money increases with economic growth to facilitate market exchanges, need more money to trade for larger quantities of goods and services in the market, what it takes to achieve growth in the Payment.
He noted that he, on the other hand produces another request economic growth in assets to reduce the ratio of currency to the money supply, coupled with diversification of financial assets and an increase to the total financial assets available in the economy.
He is virtuous: economic growth achieved in Iraq, thanks to the role and contribution of the oil sector in the composition of GDP, is not commensurate with the development of the financial sector, whether it be in size or in investment tools or in financial intermediation institutions, explaining that the abundance of financial resources is an essential accumulation induces rapid growth rates and parallel in sectors The economy.
As a result of the nature of the circumstances experienced by the country has been irregular financial environment and the existing financial structure could be described as redneck as well as limited confidence in borrowers and commercial banks which represent the core of financial intermediaries in monetary market, tinged how inadequate infrastructure and financial products and investment behaviour and norms of bank capital and transparency remain elusive.
Fazel concluded in conclusion to say: thus determined the conditions of underdevelopment fiscal and monetary instruments of financial intermediation, and underdeveloped banking environment workshop underdeveloped economic environment, this didn't notice the Iraqi economy improved banking currency and therefore the fact that the banking sector's financial legal sector is affecting the size and movement of the financial sector,
making the latter's contribution to copes and conditions of economic backwardness to attract a limited portion of their own savings to GDP and a weak flow of credit units of your activity and focus on achieving Limited quantity and fast profitability but low risk and high liquidity and loan guarantees over his quest as a supporting activity for the process of capital accumulation,
and the result is supportive of development and growth through the development of adequate financial instruments and reallocated in areas most productive social investment.