The other main members of the group include ANZ Banking Group, Bank Millennium, National Bank of Kuwait (NBK) and Standard Chartered Bank. Under the terms mandate, which is initially for a period of one year, the banks will issue and process letters of credit, train local staff and design and install banking systems.

The allocation of roles within the consortium is yet to be finalised but it is understood that JP Morgan, Standard Chartered, ANZ and NBK will form the core of the operations activities. 'JP Morgan has first refusal on credit guarantees and it is obliged to underwrite any lines that cannot be covered by the other banks,' says a banker involved in the deal. 'Some of the banks in the consortium will have very little involvement with the operation.'

The CPA will contribute $5 million to the bank's start-up capital of $100 million, with the remaining funds coming from the residual funds of the defunct UN oil-for-food programme. US export credit agency, Export-Import Bank (Eximbank), has also approved $500 million of provisional guarantees on US exports to Iraq.

Establishing TBI is the first step in revitalising the country's financial sector. International banks are also competing for the mandate to rehabilitate Iraq's biggest commercial institutions, Rafidain Bankand Rashid Bank(MEED 8:8:03).