Jared Malsin

It cannot sell its oil freely.

And it is deeply, deeply isolated.

And that created a situation where you have the central bank propping up this entire system.

Something like 70% of Iran's banks were government-controlled to some degree.

That's according to an analysis by a former IMF official that I spoke to by 2019, which is when things started to come apart at the seams.

Right, so Ayande Bank is a microcosm of these compound economic problems.

It is a bank that was formed in 2013 by a guy named Ali Ansari, who is from what's believed to be one of Iran's richest families.

He's close to the conservative establishment.

And he founded this bank that offered the highest interest rates on the market.

And it was also heavily dependent on the central bank.

Well, what the bank was doing is that it was basically acting as a kind of piggy bank for these lavish real estate projects, especially malls.

That's right.

In particular, this one mall

huge mall called the iran mall which is in northwest iran and is believed to be one of the largest shopping complexes in the world it has a hall of mirrors that is modeled after a persian imperial palace it has a car showroom it has movie theaters it has a library you know so it has like you know sports complexes it's sort of like a city within a city but here's the thing

You have this bank that's acting almost like a slush fund to fund this kind of garish shopping center that was a symbol of how these regime-connected elites are just moving this money around to enrich themselves.

What one of the senior officials at the Iranian Central Bank said last year is that Ayande Bank was operating a Ponzi scheme.

That is to say, they were loaning out more money than they could possibly repay.

And that's what you have in a Ponzi scheme, where you have a bank that is giving out loans that it cannot repay, essentially, and playing a shell game by moving that money around.

Money was leaving the country and Iranians themselves were taking their money out of the national currency, the rial.

They're dumping the rial, they're putting it in gold, in dollars, in euros.