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Financial Panic at Afghanistan's Biggest Bank

Hopes for U.S. to act as guarantor of the $1 billion in deposits

Depositors swarmed branches of Afghanistan's largest bank today as President Hamid Karzai publicly reassured, "Kabul Bank is safe." His brother, Mahmoud Karzai, a major shareholder in the bank, wants the U.S. "to do something," such as, he suggested, guaranteeing the $1 billion in funds in the bank.

Speaking in his first interview since his ouster [as the bank's chairman] Monday, [Sherkhan]Farnood, who remains a substantial shareholder, said he hoped the bank could weather the storm without U.S. help. "If we survive Saturday and Sunday, we will be okay," said Farnood, who spoke at his luxury waterfront villa in Dubai shortly after his return to the Persian Gulf emirate from Kabul. Friday is a holiday, and all Afghan banks are closed.

"If Kabul Bank collapses," he added, "it will be a disaster."

Read more . . . [The Washington Post]