The Development of the Volume of Bank Credit and Its Impact on Some Economic Variables in Iraq for the Period 2004-2018

Abstract

The subject of the study is to indicate what bank credit is and the theories related to it . in addition, it seeks to investigate its impact on certain macroeconomic variables in Iraq during the period 2004-2018. The simple regression model and the 9EVIEW program are used as instruments of measurement. The study found several conclusions, the most notable of which was that the Government was biased towards government banks and ignored private ones. It is also found that the effect of cash credit on inflation had been weakened as a result of full control of the later by the monetary authority of the Central Bank of Iraq, which had led to build-up the liquidity among commercial banks in Iraq, despite their high ratios. Consequently, the sector is unable to invest and operate its assets and deposits.. The study recommended that there are significant environmental investment plans and opportunities for the Iraqi economy that could help commercial banks to invest their own liquidity and achieve adequate profitability. This would help them to leave unethical exploitation, such as their high profit margin, as well as government bias for banks, which is not beneficial to the economy.