The experience of the bridge bank in Iraq to address banking insolvency, a case study of private banks

Abstract

The experience of the bridge bank is considered one of the new and important experiences at the level of the country's economy in general and at the level of the banking sector in particular, as the nature of this bank’s work is temporary and under the supervision of the central bank where the central bank acts as the trustee of the troubled bank, The central bank, in turn, is establishing a bridge bank for the insolvent bank in order to be able to deal with it. The research also came to shed light on an important issue that banks are exposed to, which is financial insolvency, where the meaning of bank insolvency, the reasons for its occurrence, and methods of treatment were clarified. The research reached a set of conclusions, the most important of which were the following: The phenomenon of financial distress is an existing phenomenon and many of the private banks in Iraq suffer from it, and that many of these banks did not announce an issue of their insolvency in order to preserve their reputation in front of their customers. Financial distress in banks is not a new or modern phenomenon, but rather an old one. The study also extracted a set of recommendations, the most important of which are: that the experience of the bridge bank must be applied to every bank that suffers from financial hardship in order to be able to obtain banks free from the imbalances that are possible. To hinder its banking work.