The run on Kabul Bank leaves policy makers with a set of bad choices.
Kabul Bank was created as part of US strategy to create a civil society in Afghanistan. Critics might say that is another example of cultural imperialism, where a conqueror creates institutions that mirror their own. Fine. At the same time, a banking system creates the framework for exactly the kinds of changes that will lead Afghanistan toward progress.
Deposit-holding customers have withdrawn $200 million from Kabul Bank this week.
It would be less problematic if the shortcomings at Kabul Bank weren’t so clearly due to (more…)