Legal Aspects of the Bridge Bank's relationship with the Central Bank

Abstract

This study attempts to introduce the idea of the bridge bank as one of the most important modern means devised by the American economic and legal jurisprudence to restructure troubled banks; This was applied for the first time in the Arab world by the Central Bank of Iraq. Upon application it has been revealed many flaws and shortcomings by the extrapolation of the legislative texts that regulate the legal provisions of this idea. The study tries to explain to the Iraqi legislator and drew attention to the fact that there are several legal rules that need to be reformulated, others that must be amended, and issues that need legal texts to address. This study is also concerned with focusing on the legal relationship that arises between the bridge bank and its founding party, The Central Bank of Iraq and the FDIC Corporation in the United States of America, and the powers that each of them has against the bridge bank in the light of this relationship. In addition, the legal aspects of the bridge bank’s relationship with the Central Bank were discussed by accessing the legal concept of this bank and the legal adaptation of its relationship with the Central Bank; and the content of the powers granted to the Central Bank relating to the management of the bridge bank and those related to the transactions of the bridge bank.