Planning and Budgeting

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Banks are essential and necessary links that function as special intermediaries. The type of banks affects their behavior and performance. Banks privatization has been considered as a pivotal tool along the whole continuum of economic development in many countries within the recent 30 years. This signifies that the state banks enjoy less desirability than private ones. Implicitly speaking, the predominance of banks’ private ownership leads to the encouragement of privatization policies. Meanwhile, it seems a must to get familiar with the financial system and banking structure as the right criteria and indicators of optimal privatization as well as with the fact that some critical economic and normative goals are materialized just through state ownership. One of the important subjects related to privatization is to set regulations. Terms of regulations and the rational fundamentals of the regulations should be explained while regulations are set. After privatization process is finalized, the efficiency and stability in the functions of banks as well as receiving the required guarantees from the private sector should be taken into consideration in order to make sure that the more crucial goals of the government are fulfilled and that the role of foreign (mainly private) banks have been envisaged.

Keywords: State and Private Ownership of Banks, Privatization, Banks Structure, Banking Regulations, Efficiency, Banking Stability, Foreign Banks

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