City meets Iraqi bankers to boost share of reconstruction

A delegation from the Iraqi central bank was in London last week, meeting with Treasury officials, bankers and advisers.

The high-level visit by the deputy governor of the Central Bank of Iraq, Ahmad Mohammad, and Mudher Mohammad Kasim, director- general of the Central Bank's research department, is seen as an attempt by the City to boost Britain's paltry stake in Iraq's reconstruction.

The low-profile visit is understood to have been organised by banknote printer De La Rue, which last month won a $112m (£70m) contract to print Iraq's currency, and Trade Partners UK, the Department of Trade and Industry group that visited Iraq last month.

At a meeting arranged by the Corporation of London-funded Independent Financial Services, London (IFSL), the bankers met senior figures from HSBC, Barclays and law firm Denton Wilde Sapte.

The officials also met informally with government departments, including the Treasury. Sources said there had been informal discussions, in particular about the UK model of independent central banking. A City source said: "They discussed issues related to reform and revitalisation of Iraq's financial sector and attracting foreign direct investment."

Iraq is expected to invite bids for the reconstruction of its banking system in the next few weeks. A consortium including Standard Chartered and JP Morgan, the US bank, is expected to make one bid, with a rival offer coming from a team led by HSBC. Mr Mohammad and Mr Kasim also met officials from the Treasury's international debt and capital markets division. The sensitive issue of Iraq's £1bn national debt owed to Britain was not discussed.

The push comes at a time when the Lord Mayor, Gavyn Arthur, has taken a keen interest in opening up financial markets in the Arab world beyond Iraq. Last month he held a four-hour meeting with President Assad of Syria.

The Lord Mayor told The Independent on Sunday: "Through our backing for the IFSL and through direct routes, we are keen to support the rebuilding of Iraq's financial system. A solidly based financial and banking system is a key element in any return to civil society, and institutions and businesses based in the City have unique experience of this."