Central Bank Restructuring Sparks Debate Over Banking Oversight in Iraq

The decision to proceed with Central Bank restructuring in the Iraqi cities of Basra and Mosul has sparked widespread debate among economic circles, after the branches were downgraded to directorate level instead of general directorates, raising questions about the future of banking oversight.

According to an administrative order issued by the Central Bank’s management, each of the newly structured directorates will be led by an official at deputy director-general level.

Analysts described the move as unusual, especially given that the Basra branch is one of the oldest and has traditionally overseen the southern region.

Experts argue that Central Bank restructuring in this manner could weaken supervisory capacity, particularly given the large number of bank branches and exchange companies under these offices’ jurisdiction.

They warned that reducing administrative authority may undermine effective monitoring and regulation.

Specialists stressed that maintaining strong regulatory institutions is essential for financial stability, calling for greater transparency on the rationale behind the move to ensure that Central Bank restructuring does not diminish the effectiveness of banking oversight in Iraq.