الدكتور محمد فوزي زيان فاعلية المصرف الجسري فــي عبور ثغرات الانهيار المصرفي وأسعار الصرف المتدنية

Abstract

         The global financial crisis that struck major international economies resulted in significant economic and financial changes, leading to the collapse of many banks worldwide. These collapses caused massive losses and drove several banks to declare bankruptcy. Consequently, many countries initiated legislation aimed at addressing banking collapses and their severe repercussions, in order to restore confidence in the banking sector and safeguard economic and social stability, ultimately contributing to national development and citizen welfare. One such legislative solution is the introduction of the bridge bank (also referred to in various countries as an intermediary or transitional bank). Through this mechanism, the central bank steps in to support struggling financial institutions and rescue them from the brink of collapse. This is achieved by establishing a temporary bridge bank to take over the failing bank, transferring all its assets and liabilities to the new entity. The bridge bank then manages and stabilizes the institution until a suitable buyer is found for the original bank. This process reassures all stakeholders — including investors and depositors — that their funds are safe and recoverable. The bridge bank is thus considered an exceptional entity created by the Central Bank of Iraq, and its exceptional nature is reflected in the unique conditions under which it operates. Unlike regular banks, it is not subject to the same licensing conditions, company laws, or capital requirements. From the moment it is established, full authority over its operation lies solely with the Central Bank, independent of the regulations typically applied to other banks. Iraq was the first Arab country to incorporate the bridge bank concept into its legislation through the Iraqi Banking Law No. (94) of 2004, in line with the bridge bank model found in U.S. law. Egypt later followed Iraq's lead by legislating the concept under Law No. (194) of 2020.