Nervous Afghans pull money from Kabul Bank, raising fears

[maddezmom]

Source: WaPo

By David Nakamura and Andrew Higgins
Washington Post Staff Writers
Thursday, September 2, 2010

KABUL - With Afghans clamoring to pull their cash from their nation's biggest bank, the United States risks a politically perilous decision: whether to step in to help shore up a wobbly bank critical not only to Afghanistan's economy but also to the battle against the Taliban.

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A senior U.S. official, who spoke on the condition of anonymity because of the sensitivity of the issue, played down the wider consequences that could result should Afghanistan's banking sector implode, noting that only about 5 percent of Afghans have bank accounts. But Kabul Bank, which has taken in $1.3 billion in deposits, plays a pivotal political as well as economic role: It handles salary payments for soldiers, police officers and teachers.

"The teachers will come with their books, but the soldiers have Kalashnikovs," warned a prominent Afghan businessman who spoke on the condition of anonymity.

An unchecked run on Kabul Bank, which could spread alarm to other banks, would jeopardize not only depositors' savings but President Obama's Afghan strategy, which is built around efforts to rally the public against the Taliban. But any move by the U.S. government to help shore up Afghan banks probably would stir fierce opposition in the United States, where the use of taxpayers' money to bail out Wall Street after the 2008 financial crisis still rankles many.



Read more: http://www.washingtonpost.com/wp-dyn/content/article/2010/09/01/AR2010090101620.html?wprss=rss_print

[MilesColtrane]

1. The puppet government and Our Man in Armani are teetering on the brink.

It's past time to declare victory and get the hell out of there.

[redwitch]

2. Rock and a hard place anyone?

Jeezus.