Afghan bank’s losses could reach $900m

[unhappycamper]

Afghan bank’s losses could reach $900m
New York Times / January 31, 2011

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 US, 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 fear that word of Kabul Bank’s troubles could even prompt a run on solvent banks, destroying the country’s nascent banking system and shaking the confidence of Western donors.

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 to pay Afghan security forces, leaving the US military, which pays the salaries, looking for new banks to process the $800 million payroll.



unhappycamper comment: Now you may think a billion dollars is a lot of money, but it's not. For a billion USD you can buy:

10 MV-22 Ospreys
4.5 C-17s
4 F-35s
3 F-22s
1.25 LCS ships
20% of a Zumwalt-class destroyer

[xchrom]

1. i'm sure the u.s. will help karzai keep that money pit going.

after all: in for a penny in for a pound.

[liberal N proud]

2. I was thinking the same thing when I saw this headline.

They will just get more from us.