Shafaq News – Baghdad

On Monday, Iraq’s Center for Commercial and Economic Studies, affiliated with the Ministry of Trade, held a seminar on reforms in the private banking sector, addressing the state of the banking system and potential solutions.

Economist Mustafa Hantoush told Shafaq News that discussions also tackled the Central Bank of Iraq’s (CBI) flexibility with private banks, and ways to monitor the impact of reforms going forward.

He indicated that recommendations will be submitted to the prime minister, including continued CBI flexibility toward private banks in line with their capacities, lifting restrictions on sanctioned banks, and ensuring their participation in financial operations.

Iraq’s banking sector remains under heavy strain, with nearly half of its banks facing international sanctions—an obstacle economists warn could turn reforms into a trigger for collapse rather than recovery.

Earlier, the Central Bank contracted consulting firm Oliver Wyman to conduct reviews and studies as part of its banking sector modernization plan.

The prime minister’s economic adviser, Mudhhir Salih, explained that the international firm behind the banking reform study is finalizing its work, and current efforts focus on comparing its findings with market realities to identify strengths and weaknesses. These, he noted, will guide the next phase of reforms.

He further pointed out that the government program approved by parliament in October 2022 included banking reform among its priorities, noting that the process has already begun with state-owned banks, which account for about 80% of Iraq’s banking activity.