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Revising the Monetary and Banking Law
Legal and structural contexts as well as the capacity to manage bank crises
would indicate the success of the Central Bank in establishing financial
stability.
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Dr. Akbar Komijani,
Economic Deputy of the Central Bank of Iran |
The
Economic Deputy of the Central Bank of Iran stated that in view of the Central
Bank’s responsibility for stabilizing the country’s financial system,
independence of the bank was necessary to head off the financial and banking
crises.
Akbar
Komijani added, “We must note that under the current circumstances, legal and
structural contexts as well as the capacity to manage bank crises would
indicate the success of the Central Bank in establishing financial stability.
The importance attached to the independence of their central banks in many
countries encouraged them to review their banking and monetary laws during the
1990s,” he said.
Referring
to status of the Central Bank and the banking system in the economic growth of
countries, the official stated that the new laws increased power and
independence of the Central Bank, so that, its effects were evident in the
economies of various countries. The Economic Deputy of the Central Bank
mentioned enforcement of monetary and banking policies, managing banknote and
coin minting as traditional duties of the Central Bank.
Other
important missions of the Central Bank include supervising banks and financial
institutes, controlling and stabilizing the foreign exchange market,
maintenance and management of international reserves, setting gold standards,
management of public liabilities as well as participation in settlement, swap
and insurance of people’s deposits in the face of economic shocks.
Komijani
noted that the banking and monetary law in Iran, in addition to the status of
the Central Bank, had also delineated its duties and powers. “Although the
money and banking law was approved in 1972 and has been amended thereafter due
to many changes that have taken place in the field of banking, its revision is
a necessity,” he noted.
The
Economic Deputy of the Central Bank of Iran further noted that after 17 years
of implementing the usury-free banking law and the Third Economic Development
Plan, the need for reviewing banking laws was felt more strongly than ever
before.
During the
recent years reviewing the capital and structure of banks in cooperation with
the Central Bank of Iran for protection of the value of the national currency
had been given serious attention. Implementing structural reforms in the
banking system would need designing new financial institutions capable of
playing a suitable role in the country’s economy. Komijani referred to big
challenges facing the banking system and expressed hope that the elimination
of the existing bottlenecks would help increase the efficiency of the Iranian
banking system. |
