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US taps JP Morgan Chase to lead Iraq Bank Consortium
Washington, Aug 30: The United States has selected JP Morgan Chase to run the operating consortium for the Trade Bank of Iraq, an official said.
Washington, Aug 30: The United States has selected JP Morgan Chase to run the operating consortium for the Trade Bank of Iraq, an official said.
Peter Mcpherson, Director of Economic Development for the coalition provisional authority in Iraq, told reporters in a teleconference from Baghdad yesterday that JP Morgan Chase would head the consortium of 13 banks from 13 countries.
Members of the consortium include Britain's Standard Chartered Plc, National Bank of Kuwait, the Australia and New Zealand Banking Group, Credit Lyonnais of France and Millennium Bank of Poland, the Bank of Tokyo-Mitsubishi, San Paolo Imi of Italy, Royal Bank of Canada, Spain's Caja De Ahorros Y Pensiones De Barcelona, Standard Bank Group Limited of South Africa, Portugal's Banco Comercial Portuges and Akbank of Turkey. The bank is expected to issue and confirm letters of credit -- basically payment guarantees -- to smooth trade flows, boosting imports such as heavy construction equipment and also freeing up exports, particularly of oil.
Eventually, US authorities hope there will be no need for a trade bank, and that Iraqi commercial banks would be able to write the letters of credit themselves. But for now, the creation of the trade bank was critical, officials said last month, because of a lack of creditworthy entities. "When Iraq buys equipment, the bank wants to be sure that it is paid," Mcpherson said. "The consortium will confirm to the buyer that the money will be paid."
The official said it is expected that the consortium will be operating "by the end of September."
Bureau Report
Members of the consortium include Britain's Standard Chartered Plc, National Bank of Kuwait, the Australia and New Zealand Banking Group, Credit Lyonnais of France and Millennium Bank of Poland, the Bank of Tokyo-Mitsubishi, San Paolo Imi of Italy, Royal Bank of Canada, Spain's Caja De Ahorros Y Pensiones De Barcelona, Standard Bank Group Limited of South Africa, Portugal's Banco Comercial Portuges and Akbank of Turkey. The bank is expected to issue and confirm letters of credit -- basically payment guarantees -- to smooth trade flows, boosting imports such as heavy construction equipment and also freeing up exports, particularly of oil.
Eventually, US authorities hope there will be no need for a trade bank, and that Iraqi commercial banks would be able to write the letters of credit themselves. But for now, the creation of the trade bank was critical, officials said last month, because of a lack of creditworthy entities. "When Iraq buys equipment, the bank wants to be sure that it is paid," Mcpherson said. "The consortium will confirm to the buyer that the money will be paid."
The official said it is expected that the consortium will be operating "by the end of September."
Bureau Report