Reform of Banking Laws and Regulations in Iran

The law reform process entails government policies and plans for the liberalization, privatization and deregulations of the economy including the banking and money markets. The International financial institutions (IFIs), International Development Agencies (IDAs) and the International Financial Architecture have pioneered law reform initiatives based on the rule of law practice and good governance. The dominant theory advocated by Perry-kessaris postulates that a sound legal system is attractive for foreign direct investment (FDI). The bilateral investment treaties (BITs) contain international law standards which can be used as a model for reforming laws and institutions in the host state including prudential regulation of banking and finance. Iran – a resource-rich country has signed many BITs with capital-exporting countries indicating its willingness to enforce the rule of law on the international level.