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Us sets up trade bank in iraq { July 22 2003 } Original Source Link: (May no longer be active)
http://money.cnn.com/2003/07/22/news/international/iraq_tradebank.reut/http://money.cnn.com/2003/07/22/news/international/iraq_tradebank.reut/
U.S. sets up Trade Bank in Iraq
Bank designed to help import, export goods with $100M capital as country moves to recover from war.
July 22, 2003: 7:56 AM EDT
BAGHDAD (Reuters) - The U.S.-led Coalition Provisional Authority said Tuesday it had created the Trade Bank of Iraq and asked international banks for proposals to help establish it.
The CPA said in a statement the bank would provide financial and related services to help the import and export of goods and services to and from Iraq.
The Wall Street Journal reported Tuesday that the CPA will choose a mix of international banks by August to manage the bank.
The lure of new business has banks worldwide rushing to build alliances that will compete to run the bank, the paper reported, citing U.S. officials and international financial executives.
Those banks include J.P. Morgan Chase & Co (JPM: Research, Estimates)., which has joined forces with the U.K.'s Standard Chartered PLC, the National Bank of Kuwait, the Australia and New Zealand Banking Group Ltd. and Poland's Millennium Bank, according to the Journal.
Financial services firm Citigroup Inc (C: Research, Estimates). may be another contender, along with Deutsche Bank AG, which would likely be tied up with a large U.S. bank, the paper reported.
In London, Standard Chartered declined to comment on the report but said it was looking for opportunities in Iraq.
"We are well placed to support the reconstruction of Iraq. We've got more than 50 years experience operating in the region and we're currently providing assistance on donor and aid funding to the country," said a spokesman for the company.
The bank said it has appointed a Dubai-based executive to oversee its interests in Iraq.
"Existing Iraqi banks are presently ill-equipped to support import-export trading activities. They lack sufficient expertise and international links," the CPA statement said.
"Existing financial institutions within Iraq are fully engaged in re-establishing basic banking services and have limited capacity for specialized trade services."
It went on to say that the bank, which would also help facilitate "the transition from state-owned enterprises to greater privatization," would have an authorized capital of $100 million.
The Journal report said U.S. officials expect to receive around a half dozen bids for the business, which will issue letters of credit that guarantee payment by Iraqi agencies and firms that want to buy big-ticket goods abroad.
There is no front-runner at this point for the deal, according to the paper citing Peter McPherson, the top Treasury Department adviser stationed in Baghdad.
McPherson said the winning group will consist of banks from at least two countries.
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