Russia says it wants to help U.S. stabilize Afghanistan

NF Reporter · 02-04-2009, 02:13 PM

AP - President Dmitry Medvedev said Wednesday that Russia and its ex-Soviet allies want to help the United States stabilize Afghanistan, saying Moscow wanted "full-fledged" cooperation with Washington.

Russia says it wants to help U.S. stabilize Afghanistan

waltky · 09-03-2010, 11:50 PM

Granny says, "Okay - let Russia bail out Afghan bank...

Afghan Financial Crisis Panics Bank Depositors
(Sept. 3,`10) -- Panicked depositors deluged Kabul Bank branches this week in Afghanistan, withdrawing nearly $200 million and fueling fears that the country's largest private bank may collapse.

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"If this goes on, we won't survive," said Khalilullah Frozi, one of the financial institution's largest shareholders, according to The New York Times. "If people lose trust in the banks, there will be a revolution in the financial system." If depositors continue to withdraw money at the current rate, Kabul Bank will probably collapse, Frozi told the Times in an interview in today's paper. That would severely undermine the country's fledgling financial system, which Afghan leaders have been trying build on their own, he said. Afghanistan's banks are closed today in observance of the Muslim sabbath.

President Hamid Karzai has pleaded for calm. "The Kabul Bank is safe," he said Thursday at a news conference with visiting U.S. Defense Secretary Robert Gates, The Washington Post reported. "People need not panic, need not be worried." Gates told reporters that depositors were able to access their funds. "As I understand it, the bank is open. Last time I checked, it was providing money to the depositors that wanted it. The government, the central bank, has provided additional cash to them," Reuters quoted him as saying.

But Haji Tamim Sohraby, a construction company owner who went to Kabul Bank's glass-walled headquarters in the Shahr-e-Nau district, told Bloomberg News Thursday he could withdraw only a small portion of his money. "I have $15,000 deposited, and now they are telling me they are out of money, and I was able to take only $1,000." Despite his brother's promise that Kabul Bank is safe, Mahmoud Karzai, its third-largest shareholder, urged the U.S. to help and said the lender could keep pace with withdrawals for only a few more days, according to The Wall Street Journal.

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A bank bailout for Afghanistan?
September 3, 2010, A run on Kabul Bank — the nation's largest — is triggering fears of an Afghan financial meltdown. Should the U.S. step in?

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Panicked customers are pulling money out of Afghanistan's largest bank as rumors spread of its possible insolvency. Now, Kabul Bank's executives and investors are calling for a U.S. bailout to prevent a full scale run on the financial institution. American and Afghan officials are worried that a collapse at the bank, which allegedly blew a fortune on bad investments, could trigger a meltdown of the country's financial system that would overwhelm the government and aid the Taliban. Should Washington step in and bail out the bank?

Sadly, we may have no choice: We must act now, says Amy Davidson at The New Yorker, to prevent our war in Afghanistan from being "compromised by a bank." Letting Kabul Bank collapse would leave Afghan police and soldiers without pay, provoke civil unrest, and undermine our efforts to win hearts and minds against the Taliban. With so much at stake, American taxpayers may "end up bailing this bank out" whether they like it or not.

"Too corrupt to fail?"

A bailout will do nothing unless we get rid of Karzai: Kabul Bank is run by President Karzai's cronies and family members, says Juan Cole at Informed Comment, which is why nothing was done about its irresponsible loans and investments. A bail-out won't tackle the root of the problem: The "Ponzi scheme" that is the Karzai government. Until this "corrupt and rotten" president is impeached, we will be throwing our money down a drain.

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waltky · 09-05-2010, 07:56 PM

Wonder how much we had to put up to bail it out and how much we had to bribe `em to do it?...

Afghan Central Bank: Kabul Bank has `stabilized'
Sep 5,`10 -- Afghanistan's largest bank remained solvent Sunday after a nearly weeklong run on the troubled institution, according to the governor of the nation's central bank, which is being criticized for looking the other way at the bank's mismanagement problems for too long.

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Nervous depositors continued to make withdrawals, but Central Bank Governor Abdul Qadir Fitrat said the Kabul Bank was on sound footing. He said no decision had been made about whether the central bank would use money in its coffers to shore up Kabul Bank, partly owned by President Hamid Karzai's brother. "It's stabilized. The bank is already stabilized and hopefully in the next few days it will become 100 percent normal," Fitrat told The Associated Press. "It is almost 60 percent to 70 percent returned to normal.

Most of the branches are now empty (of customers). People have taken their money and gone home. It's very good today. The operation is becoming very normal." Abdullah Abdullah, who challenged President Karzai in last year's presidential election, criticized the government, saying it should have acted more quickly to correct management problems at Kabul Bank. The run on the bank began on Wednesday following a change in leadership and reports that tens of millions of dollars had been lent for risky real estate investments involving the political elite. "The extent of the problem seems to me to be massive and the misconduct seems to be a very prolonged one," Abdullah said.

"Why wasn't it dealt with earlier?" he asked reporters gathered at his home for a new conference in which he also questioned whether central bank reserves should be used to bolster the bank's balance sheet. Uncertainty about the bank's future has further destabilized the war-torn country and efforts by the central government to build an efficient political and financial system to drag Afghanistan out of poverty. If not resolved, problems at the bank could have wide-ranging political repercussions.

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