An Iraqi affairs researcher said external pressure alone would not be sufficient to drive major changes in Iraq’s financial system, stressing that meaningful and sustainable reform requires clear domestic political will and broad institutional backing.
The researcher noted that the close relationship between financial institutions and political elites remains a major obstacle to structural reforms, adding that efforts to modernize and strengthen the banking sector continue to face challenges due to limited political support.
The comments come as discussions intensify in Baghdad over the future of Iraq’s economy and measures needed to reduce the risk of potential financial crises, while the country’s banking sector undergoes a period of significant restructuring and regulatory changes.
An economic expert, meanwhile, said Iraq’s banking sector should not be viewed as being on the verge of collapse, but rather as going through a difficult phase of restructuring, reform and reassessment. The expert said the process, despite its challenges, is necessary to prepare the sector for sustainable growth and greater resilience.
Concerns have grown following the Central Bank of Iraq’s decision to place Al-Taif Islamic Bank under temporary guardianship for 18 months over financial violations. The move triggered protests by depositors outside the bank’s branches in Baghdad and Basra, with demonstrators demanding access to their funds and calling for greater protection of confidence in the country’s banking system.
