Result Based Management Framework - METAC

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III. IRAQ
A. Banking Supervision
Past Activities
In the first phase of METAC’s operations, TA to the Central Bank of Iraq (CBI) was
limited to participation in seminars or TA missions organized by IMF HQ and other joint
IMF/Federal Reserve seminars. However, the CBI was receiving extensive assistance in
various banking supervision areas from USAID (BearingPoint).
Beginning in FY 2009, METAC started providing the CBI with direct TA activities in
banking supervision, including:
Drafting various prudential regulations, namely: bank licensing requirements and
procedures, minimum capital requirements, loan classification and loan
impairment and provisioning, internal control system and procedures, guidelines
for bank risk management, and foreign exchange operations and limits.
Designing various supervisory call reports and financial statements.
Providing capacity building activities in various issues related to banking
supervision and International Financial Reporting Standards (IFRS), in addition to
training on the new prudential regulations and the new supervisory call reports
prepared in assistance with METAC.
In addition to the above, the CBI has been implementing, since 2009, a banking reform
program with substantial help from the WB in addition to other TA providers, including
the IMF. The main element of the banking reform agenda consists of restructuring the
two largest banks which are state-owned through reorganizing the banks and cleaning
their balance sheets. The CBI also received extensive assistance to enhance banking
supervision and develop banking regulations. At the beginning of 2011, several new
banking supervision regulations were issued by the CBI.
Objectives
Work Program
Although the current level of banking regulations should allow the CBI to perform its
banking supervision function effectively, it still lacks many important components to
become operationally effective.