**World Bank Press Release**

[billiebobt]

Press Release No:2012/087/MNA

WASHINGTON, September 24, 2011 – A new World Bank report released today, Republic of Iraq Financial Sector Review, highlights that while reforms are ongoing in the financial sector, the country needs to push further to ensure that a system still characterized by state-domination and lack of transparency reaches its full potential.

The report stresses the critical importance of the financial sector in modernizing the Iraqi economy and allowing it to reach its full potential.

“The link between sound and well-developed financial systems and rapid and sustained economic growth is clear and backed up by decades of empirical evidence in many developed and developing countries,” says Sahar Nasr, World Bank Finance Lead Economist in the Middle East and North Africa region and the report’s principal author. “Efficient and prudent allocation of resources by the financial system is absolutely critical for increasing productivity, enhancing equality of opportunity, and reducing poverty.”

The report assesses the impact of recent reforms introduced by the Iraqi Government and the Central Bank of Iraq on the performance and soundness of the financial sector, as well as the sector’s contribution to enhancing Iraq’s economic growth.

Its key findings about challenges facing the sector include:

· Domination by the banking system, with most assets held by state-owned banks;

· The need for further strengthening and consolidation even while many private banks are in the process of developing modern banking practices;

· Concentration of other financial markets in the Iraqi Stock Exchange but capitalization is low, and few instruments are traded;

· A small insurance sector, dominated by state-owned enterprises, and is not supervised;

· Weak financial infrastructure a clear impediment to access to finance; and

· SME and microfinance not yet well developed.

The report also emphasizes that while work should commence on a broad range of issues, some key decisions need to be taken immediately and others may be implemented over the medium term. Crucial issues to be addressed up front are the role of state banks and the creation of a level playing field for all banks. This will need to be followed by the early adoption of the proposed permanent Securities Law and steps to turn the insurance Diwan into an effective supervisor. Supporting ongoing efforts will be needed to address financial sector infrastructure, including supervision, credit registry, the collateral framework, judicial systems, and accounting and auditing frameworks.

The progress and pace of reforms have been commended by donors and the international community despite ongoing challenges on the security front and the predictable resistance to new ideas and reforms. “This is a fairly large agenda but ongoing reforms will facilitate the move forward with the Banking Sector Reform Strategy initiated by the Iraqi government in 2009,” says Hedi Larbi, World Bank Country Director for Iraq.

The Government of Iraq acknowledges that there is still work to be done to fully reform the sector and address its main challenges.

“We are aware that we still have some way to go to achieve the reform we want and Iraq deserves and we will continue to foster efforts to enhance our financial system” says H. E. Dr. Rafie El Essawi, Republic of Iraq Minister of Finance “This report and its recommendations will assist us in the ongoing efforts to meet this challenge”.

LINK

[Dady_Banker]

Great read! I think I know what will help them move foward...Go RV!!!

[only 1-25k dinar]

So, how does this sound to you all??? To me, it sounds like we might still have a ways to go, Your thoughts?

[Shick]

I AGREE THE READ IS GREAT! WHAT THE IRAQI PEOPLE SO MUCH DESIRE IS FOR THE DINARS TO RV ALSO I HAVEN'T READ WHERE THE JOBS WILL BE COMING FROM, MAYBE THEY HAVE SO MUCH IN STOCK, JOBS ISN'T AN ISSUE AT THE MOMENT. I CAN SEE A LOT MORE IRAQIS COMING TO THE USA, ONCE THEY CAN SEE A RAY OF HOPE AND BECOME FINANCIAL STABLE. GO RV

[SPECIAL LADY]

So, how does this sound to you all??? To me, it sounds like we might still have a ways to go, Your thoughts?

I HOPE NOT!!!!!!!

[only 1-25k dinar]

I HOPE NOT!!!!!!!

ME TOO !!!!!

[Deep Purple]

So, how does this sound to you all??? To me, it sounds like we might still have a ways to go, Your thoughts?

Yeah it sounds like Iraqi leadership is lacking, both government, and banking, and may be another 2 or 3 years before any RV comes through, even if there is an RV. The way our luck is running with these nit wits, we may be screwed in the long run with a lop.

[gakman]

My Translation- Progess but NOT enough!

[sheepdog]

progress being made, words sound good, but an RV could be a long way off. Anybody heard anything about Sbabibi's meeting in DC yesterday?

[usndiver]

"predictable resistance to new ideas and reforms".

So will the "pol's" in Iraq continue to sit in their own dirty diapers, or will they move forward for their countrymen?

Time will tell.

[skitealwedrop]

Press Release No:2012/087/MNA

WASHINGTON, September 24, 2011 – A new World Bank report released today, Republic of Iraq Financial Sector Review, highlights that while reforms are ongoing in the financial sector, the country needs to push further to ensure that a system still characterized by state-domination and lack of transparency reaches its full potential.

The report stresses the critical importance of the financial sector in modernizing the Iraqi economy and allowing it to reach its full potential.

“The link between sound and well-developed financial systems and rapid and sustained economic growth is clear and backed up by decades of empirical evidence in many developed and developing countries,” says Sahar Nasr, World Bank Finance Lead Economist in the Middle East and North Africa region and the report’s principal author. “Efficient and prudent allocation of resources by the financial system is absolutely critical for increasing productivity, enhancing equality of opportunity, and reducing poverty.”

The report assesses the impact of recent reforms introduced by the Iraqi Government and the Central Bank of Iraq on the performance and soundness of the financial sector, as well as the sector’s contribution to enhancing Iraq’s economic growth.

Its key findings about challenges facing the sector include:

· Domination by the banking system, with most assets held by state-owned banks;

· The need for further strengthening and consolidation even while many private banks are in the process of developing modern banking practices;

· Concentration of other financial markets in the Iraqi Stock Exchange but capitalization is low, and few instruments are traded;

· A small insurance sector, dominated by state-owned enterprises, and is not supervised;

· Weak financial infrastructure a clear impediment to access to finance; and

· SME and microfinance not yet well developed.

The report also emphasizes that while work should commence on a broad range of issues, some key decisions need to be taken immediately and others may be implemented over the medium term. Crucial issues to be addressed up front are the role of state banks and the creation of a level playing field for all banks. This will need to be followed by the early adoption of the proposed permanent Securities Law and steps to turn the insurance Diwan into an effective supervisor. Supporting ongoing efforts will be needed to address financial sector infrastructure, including supervision, credit registry, the collateral framework, judicial systems, and accounting and auditing frameworks.

The progress and pace of reforms have been commended by donors and the international community despite ongoing challenges on the security front and the predictable resistance to new ideas and reforms. “This is a fairly large agenda but ongoing reforms will facilitate the move forward with the Banking Sector Reform Strategy initiated by the Iraqi government in 2009,” says Hedi Larbi, World Bank Country Director for Iraq.

The Government of Iraq acknowledges that there is still work to be done to fully reform the sector and address its main challenges.

“We are aware that we still have some way to go to achieve the reform we want and Iraq deserves and we will continue to foster efforts to enhance our financial system” says H. E. Dr. Rafie El Essawi, Republic of Iraq Minister of Finance “This report and its recommendations will assist us in the ongoing efforts to meet this challenge”.

LINK

I like the sentence that says "some key decisions need to be taken immediately and others may be implemented over the medium term." The use of the word "taken" is odd. Typically decisions are made. Right? I wonder if the sentence relates to Tallibani's statement regarding the RV with a subsequent LOP. Hmmmm!

[ronscarpa]

Iraq urged to reform financial system - Rueters Article - 09/25/2011

(from Red Lily post at People Invested)

http://www.reuters.com/article/2011/09/24/us-worldbank-iraq-idUSTRE78N33Q20110924

By Rachelle Younglai

WASHINGTON | Sat Sep 24, 2011 @ 7:15pm EDT

(Reuters) - Iraq's banking system is hurting the country's growth prospects and must be revamped in order to entice foreign investment and diversify the oil-producing economy, international lending bodies said on Saturday.

Seven state-owned banks dominate the banking system and hold 89 percent of the country's bank deposits, according to a report authored by the World Bank. Many of the banks provide limited services, most of the commercial banks do not operate as banks and some sell cars, experts said.

"Iraq has to look like a diversified economy because it has to provide jobs for millions of people," World Bank country director Hedi Larbi said on the sidelines of the International Monetary Fund and World Bank meetings in Washington.

"This is a country where the potential is huge. We need to help Iraq as the next tiger of the region," he said.

The World Bank said the Iraqi government had to clean up banks' balance sheets, boost supervision of the financial system and level the playing field for competition from the private sector.

"To better balance the economy, a deepening of the financial sector is needed to support growth of the non-oil sector," the poverty fighting institute said in its report.

Officials said Iraq's muddled financial sector was but one of the barriers to economic growth and said security and macro-economic stability was still needed.

"It has improved an enormous amount, but it is still a risky environment," said Ron Van Rooden, the IMF's mission chief for Iraq.

WEAKER OIL PRICES

The IMF expects Iraq's gross domestic product to expand 9.6 percent this year and 12.6 the following year. That is in sharp contrast to many other Middle Eastern and North African countries, which will see declines in growth in 2012 due to weakening oil prices and a global slowdown.

Iraq's finance minister said his country would be able to weather the downturn in oil prices with higher output.

"If we increase the production versus the changes in the prices this can make up the budget," Rafi El Essawi told reporters. "With the hope that we may add to the infrastructure of the export of oil at the end of this year, we will add a little bit to the Iraq economy."

The country is currently producing about 2.7 million barrels per day (bpd) and is trying to boost output capacity to 12 million bpd by 2017.