An international consortium of banks will be selected as early as August by US officials to handle letters of credit, perhaps totalling bns of dollars in time, to assist <
- xml:namespace prefix = st1 />Iraq’s recovery efforts. The group will manage a newly created Trade Bank of Iraq, scheduled to open with an authorised capitalisation of US$100mn, allowing Iraqi ministries and oil agencies to begin buying abroad. Potential transactions are currently being estimated at US$100mn dollars per month, with substantially more banking opportunities once Iraq’s oil industry begins to function again.
Before the war, Iraq’s oil revenue went into a UN-controlled account in Paris; now it goes into a special account of the Iraq Central Bank administered by the US-led provisional authority. Future purchases for the rebuilding of Iraq will be paid for from an Iraq Central Bank account within the Federal Reserve Bank of New York
Large financial institutions have discussed an Iraq contract for more than a month with officials from various US government agencies Treasury, Opic, and USAid.
US officials now insist that it is crucial for Iraq’s economy to receive as much worldwide exposure as possible through any winning management group. Banks with a significant presence in the Middle East have been encouraged to participate, and even those from nations which opposed the war. The aim is to select a group with banks from at least two different countries.
The contract is expected to run 12 months, with the possibility of an extension, but will not be permanent.