Juan Cole writes today:
In other news, the BBC reports that Da Kabul Bank, among the country’s biggest such institutions, has been taken over by the Afghanistan government in the face of a persistent run on it by frightened depositors. The bank has huge debts and has been run like a private fief. The central bank had earlier denied that it would take over the troubled Kabul Bank. But the government pays government and military salaries through it, and could not easily lose it, or risk that its failure would lead to a collapse of the country’s entire financial sector, with massive runs on other banks. The central bank’s takeover makes it most likely that American taxpayers will bail out the Kabul Bank, which had been used by a clique around Karzai to buy up real estate (some of it now worthless) in Dubai.