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Treasury penalties and the bitterness of the lesson
Economical 02/25/2024
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Yasser Al-Metwally,
I completely disagree with those who portray the Treasury’s action against banks as a measure to prevent dealing in the dollar. Rather, it is an actual punishment. So why improve the image?
Let us examine the negative effects of the treasury’s decisions on the banking sector. The first effect is harming the banks’ reputation, and everyone knows the effects of reputational risks in disrupting banking work and the reluctance of customers to deposit or withdraw their money simply because of specific fears resulting from the chaos caused by sanctions, rumors, and some lurking speculators.
At a time when strenuous efforts were made by the banks, their associations, and even the Central Bank during the past short period to restore confidence, and banking activity began to recover and provide some banking services to the fullest extent, until the US Treasury’s decisions came against more than a third of private banks, without a doubt, causing reputational risks from new.
But it seems that confidence still remains among some of the customers in the strength, sobriety, steadfastness, and conviction in the face of these decisions that appear to be violations and are hidden for political purposes, and even the violations highlighted were for previous periods before the instructions issued by the Treasury.
Here, the banks that were subjected to these sanctions must work steadfastly and not let these decisions weaken their role in providing banking services that contribute to enhancing confidence and deepening their bridges with customers in order to continue banking activity.
Perhaps what some banks offer is a source of admiration and unparalleled steadfastness. I mention, for example, Al-Tafif Islamic Bank, the International Islamic Bank, and other banking activities and products that do not care about sanctions, which is the ideal response to these absurd sanctions in some of them.
The issue of canceling the currency window was decided a while ago, and we have warned in several articles not to rely on the window’s activity as it is temporary and under specific circumstances.
The process of mitigating the impact of Treasury sanctions requires the relevant authorities (the Central Bank, the Ministry of Finance) to find means of support to protect banks and support them in practicing their credit and other banking activities. Perhaps the Deposit Insurance Company and its activation are one of the most important of these means, despite my observations on the weakness of its media and marketing role, as it It needs to clearly show its activities. In parallel, the Central Bank and the Association of Banks must work in all available ways to find means to cancel most of these unfair decisions against some banks due to their commitment to the required international standards.
Banks should benefit from the decision to allow dealing in currencies alternative to the dollar in foreign transfer activities, especially since BRICS is a strong competitor that is inevitably coming, and it is an opportunity that will provide Iraq and help it be accepted into the group in the future.
There is no way to get rid of the burden of the dollar except with the next alternative, and the Treasury, with its measures, is pushing
to search for an alternative.
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