Financial Crime World

Iraq Strengthens Banking Industry Regulations Ahead of 2023 Deadline

Enhancing Regulatory Framework

In a major push to enhance the country’s banking sector, Iraq’s Central Bank has been working closely with the Multilateral Technical Assistance Center (METAC) to strengthen its regulatory framework. Over the past few months, METAC has conducted several off-site missions in Jordan and Amman to assist the Central Bank of Iraq (CBI) in revising and finalizing key banking regulations.

Key Areas of Focus

  • Capital Adequacy Framework for Islamic Banks: METAC provided comprehensive training to a group of CBI supervisors on various regulation components, including eligible regulatory capital, credit, operational, and market risk.
  • Financial Position and Profit or Loss Statements: The revised statements have been aligned with International Financial Reporting Standards (IFRS), including IFRS 9, to ensure greater transparency and accuracy.

Technical Assistance in Key Areas

Central Bank Operations Department

METAC has provided technical assistance to the Central Bank Operations department to support the implementation of central bank liquidity instruments. These instruments will enable the CBI to better manage domestic monetary conditions in support of the exchange rate peg.

General Commission of Taxes (GCT)

METAC has been working with Iraq’s GCT on good practice in organizational design. The GCT has undergone a major structural reform aimed at improving automated and networked systems, flexibility, and autonomy in administrative operations.

Central Statistics Organization of Iraq (CSO)

  • Supply and Use Tables: METAC has provided support in generating initial estimates and integrating them into a manual balancing tool.
  • Residential Property Price Index: The CSO has implemented improvements to the consumer price index (CPI), including working with authorities to create an experimental compilation system based on chained short-term relatives and geometric means in Excel.

Commitment to Meeting International Standards

These efforts demonstrate Iraq’s commitment to strengthening its banking industry regulations, improving tax administration, and enhancing statistical capacity. The country aims to meet international standards and best practices ahead of the 2023 deadline, ensuring a more stable and transparent financial sector for businesses and citizens alike.