By Matt Smith, for Arabian Gulf Business Insight (AGBI). Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.
Iraqi Bank Reforms Could Open up Sector for Regional Investors
Last month the Central Bank of Iraq said that seven previously restricted banks had been given permission to reintegrate into the US dollar system. The US treasury has pushed back against the reports - and what the US says in Iraq goes, at least financially.
Previously it has sanctioned Iraqi banks on the grounds that they are used as conduits for Iranian funds. Under UN resolutions, the Federal Reserve Bank of New York still receives Iraqi oil revenues into an escrow account and distributes to Baghdad as and when it sees fit. This, combined with pervasive Iranian influence in Iraq, creates a challenging environment for outsiders.
Baghdad is however tightening governance rules for private lenders amid an ongoing anti-corruption drive instituted by Ali al-Zaidi, the new prime minister. Last year a government spokesman said that the government had hired consultancies Oliver Wyman of the US and the UK's EY to reform state-owned banks including the behemoths Rasheed and Rafidain.
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