The impact of excess reserves on banking depth in Iraq Iraq a case study for the period (2004-2021)

Abstract

This research mainly aims to clarify the role and importance of surplus financial reserves in the Iraqi banking sector, as the reserves management in Iraqi commercial banks resort to maintaining reserves in excess of their basic needs in order to face any decrease in the total reserves available to the bank in order to face exposure to sudden deposit withdrawals Or facing any emergency and unexpected circumstance, and although the surplus reserves are assets that do not generate financial returns, they are used to cover the future needs of the bank, The nature of the work of the banking system is usually subject to a state of uncertainty in a very large way, as the study relied on the analytical approach in studying the size of reserves and financial depth, as the research problem lies in studying the effects that surplus reserves can leave in the banking work of the Iraqi banking sector, and the study has reached That there is an effect of excess reserves on banking depth, and as a result, the study recommends the need for the banking system to develop a special strategy to determine the best level for the volume of excess reserves that it uses to grant loans, and thus contribute to raising the banking depth ratio.