This report was initiated at the request of the Iraqi government to get a better understanding of the overall financial sector in Iraq. The main objective of the report was to develop a comprehensive assessment of the financial sector. This report takes a first look at the overall financial system of Iraq with a forward looking approach. Key findings of the report are: 1) Iraq's financial sector is dominated by the banking system, with most assets held by state-owned banks; 2) many private banks are in the process of developing modern banking practices, but still need further strengthening and consolidation; 3) other financial markets are concentrated at the Iraqi stock exchange but capitalization is low, and few instruments are traded; 3) the insurance sector is small, dominated by state- owned enterprises, and is not supervised; 4) weak financial infrastructure is a clear impediment to access to finance; and 5) Small Medium Enterprises (SME) and microfinance is not well developed.