Iraq Economic News and Points To Ponder Wednesday Morning 8-13-25
A Banking Disaster... 10 Iraqi Banks Are Under The Guillotine!
August 13, 2025 Al-Mustaqillah/- In a dangerous development that exposes the fragility of the Iraqi banking system, Central Bank Governor Ali Al-Alaq announced on Tuesday that 10 Iraqi banks are now subject to liquidation after being unable to return customer deposits.
This development raises serious questions about the future of the country's financial sector.
Al-Alaq revealed that 80% of Iraqi currency remains locked away from banks due to a lack of trust in the banking system, reflecting a long-standing failure to restore public confidence.
According to informed sources, this liquidation is not merely an "administrative reform,"
but rather comes amid stifling US pressure and sanctions targeting a number of Iraqi banks on charges related to illegal transfers, rendering them unable to continue their financial activities.
The 2025 banking reform document promoted by the Central Bank aims, according to Al-Alaq,
to modernize the banking system and attract global partnerships.
However, it is striking that only 10% of banks have expressed reservations about the plan,
while the rest face the risk of collapse or closure.
The liquidation of these banks may open the door to questions about who bears responsibility for their collapse. Are they victims of external sanctions, or the result of the corruption and mismanagement that have plagued the banking sector for decades?
As the government promotes reform plans, the Iraqi banking sector appears to be entering a "cruel selection" phase between those who will survive and those who will be wiped out... but the price may be paid first by depositors.
https://mustaqila.com/كارثة-مصرفية-10-بنوك-عراقية-تحت-المقصلة/
Relations: 10 Banks Are Unable To Return Customer Deposits, And Lack Of Confidence Keeps 80% Of Funds Outside Banks.
Economy Yesterday, 12:35 | 1760 Baghdad Today – Baghdad Central Bank Governor Ali Al-Alaq confirmed on Tuesday (August 12, 2025) that approximately 80% of the Iraqi currency is stored outside banks in homes due to weak confidence in the banking system.
Al-Alaq explained in a press statement followed by "Baghdad Today" that "the reform document for the year (2025) aims to modernize banks according to international standards and attract global partnerships," stressing that "the banking reform document represents a strategic step to enhance confidence in the Iraqi banking system and address shortcomings."
He also revealed that only (10%) of the banks expressed reservations about the plan, while there are (10) banks under liquidation due to their inability to return customers’ deposits. https://baghdadtoday.news/280767-80.html
The Governor Of The Central Bank Holds An Important Meeting With Oliver Wyman.
August 12, 2025 The Governor of the Central Bank holds an important meeting with Oliver Wyman.
His Excellency the Governor of the Central Bank of Iraq, Mr. Ali Mohsen Al-Alaq, and the relevant team
held a meeting with Oliver Wyman to discuss the contents of the Iraqi Private Banks Association’s letter regarding the banking reform plan.
His Excellency confirmed that the Central Bank had completed an extensive discussion,
during which the attendees expressed their understanding of the points contained in
the letter and ways to flexibly adapt some of the plan’s provisions to facilitate implementation.
The company has begun studying available means to present the best proposals and ideas in this regard as soon as possible.
This bank confirms what it announced during the months-long preparation period of the plan, that the
goal of the plan is to achieve a real project to build and stabilize the banking sector, enabling it to to operate safely and effectively in accordance with international practices and standards and
local laws.
This is to enhance governance, compliance, and risk management, and to transition banks to an economic role that enhances the development process and provides services with the highest levels of efficiency and effectiveness, utilizing the best practices and modern technologies.
The bank emphasizes that the plan will enhance local and international confidence in the Iraqi banking sector, particularly since implementation of the plan and adherence to its provisions will lead to the restoration of relations between all banks that meet the plan's requirements and internationally accredited correspondent banks, particularly those banks that do not currently have international banking relationships.
The bank also thanks all banks for their engagement with the plan and their fruitful cooperation with the Central Bank to achieve common goals in the public interest, emphasizing that the plan's success depends on the cooperation of all concerned parties.
The bank noted that it has succeeded in many aspects over the past period and hopes to continue to implement this plan to its fullest potential. Central Bank of Iraq Media Office https://cbi.iq/news/view/2952
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