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interestrateripoff

Losses At Afghan Bank Could Be $900 Million

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http://www.nytimes.com/2011/01/31/world/asia/31kabul.html?ref=business

KABUL, Afghanistan — Fraud and mismanagement at Afghanistan’s largest bank have resulted in potential losses of as much as $900 million — three times previous estimates — heightening concerns that the bank could collapse and trigger a broad financial panic in Afghanistan, according to American, European and Afghan officials.

The extent of these losses make it clear that keeping the bank afloat — something the government has said it is determined to do — would require large infusions of cash from an already strained budget.

Banking specialists, businessmen and government officials now fear that word of Kabul Bank’s troubles could prompt a run on solvent banks, destroying the country’s nascent banking system and shaking the confidence of Western donors already questioning the level of their commitment to Afghanistan.

The scandal has severe political and security implications. Investigators and Afghan businessmen believe that much of the money has gone into the pockets of a small group of privileged and politically connected Afghans, preventing earlier scrutiny of the bank’s dealings.

The spotlight on how political and economic interests in Afghanistan are intertwined threatens to further undermine President Hamid Karzai’s government. The bank is also the prime conduit for paying Afghan security forces, leaving the American military, which pays the majority of the salaries, looking for new banks to process the $1.5 billion payroll.

As Afghan regulators struggle to find out where the money went, many officials and international monitors concede that the missing millions may never be recovered, raising questions of how the losses could be replaced to keep the bank from failing.

I wonder how many of these official's investigating what happened have ended up being paid off with some of the money? Isn't that how things culturally work in Afghanistan?

Still nice to see that no matter where the bank is the taxpayer gets to foot the bill. It shouldn't be any other way. I mean why bother paying for services out of taxes when it can just be given straight to the bankers.

Edited by interestrateripoff

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must save it...we have geniuses with million dollar salaries to protect.

cant have ordinary people filling in paying books, adding it all up and seeing if there is any left over to lend.

Edited by Bloo Loo

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I wonder how many of these official's investigating what happened have ended up being paid off with some of the money? Isn't that how things culturally work in Afghanistan?

since we taught them our culture. Don't tell me the taliban were into banking fraud, that's our specialism

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KabulBank went bust last September. They had bank runs, troops on the steps, the whole works.

Then the central bank stepped in.

We had a thread on it and everything: http://www.housepric...ic=150655&st=15

ah, they had a bank, and called it a bank.

Afghaneese didnt know what it was, because in their language, its called putarodauppermebum

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