Iraq is starting not only a new government but also a new system for banking in their country. In the blog The Iraqi Central Bank Law covers the topic of what new banking laws will bring to the long-term growth of the country, along with stability. By creating strict guidelines the government is hoping to maintain domestic price stability along with a stable and competitive market-based financial system.
The Law has 74 articles and 42 pages covering every topic one can think of. It very carefully defines the roles the government will play in the new system, monetary policy and open market operations. In creating such defined rules and regulations it appears to be the making of an honest government which would lead to growth.
One of the Authors points in the article was that the new laws failed to define “domestic price stability. That leaves “domestic price stability” to be defined by the “international standards” which is “slow and steady inflation.” Inflation won’t cause the country to be any poorer, in fact inflation would do the exact opposite, and it would help redistribute income. Inflation will also help the wages of the people go up, making growth the end result. Isn’t growth what really matters