This report was initiated at the request of the Iraqi government to get a better understanding of the overall financial sector in Iraq. The main objective of the report was to develop a comprehensive assessment of the financial sector. This report takes a first look at the overall financial system of Iraq with a forward looking approach. Key findings of the report are: 1) Iraq's financial sector is dominated by the banking system, with most assets held by state-owned banks
2) many private banks are in the process of developing modern banking practices, but still need further strengthening and consolidation
3) other financial markets are concentrated at the Iraqi stock exchange but capitalization is low, and few instruments are traded
3) the insurance sector is small, dominated by state- owned enterprises, and is not supervised
4) weak financial infrastructure is a clear impediment to access to finance
and 5) Small Medium Enterprises (SME) and microfinance is not well developed.