Jessica Mendoza

It's Thursday, January 15th.

Coming up on the show, how the collapse of a bank sent Iran into a tailspin.

Iran's current financial crisis has its roots in 2018, during President Trump's first term.

The Iran nuclear deal, brokered by the Obama administration, was meant to curb the country's nuclear program in exchange for sanctions relief.

Trump reversed course and took a hard line against Iran.

The renewed sanctions meant that Iran's banks couldn't do business with the outside world.

To put it simply, money stopped flowing into Iran's banks.

In the years that followed, the Iranian government came up with workarounds to try to keep its economy afloat.

For example, Iran's oil industry has had to increasingly rely on a so-called shadow fleet of tankers to export oil abroad.

That kept some money flowing to the state's coffers.

Iran also used a workaround for its banks, turning to banks in Iraq for access to cash.

But that practice became a lot tougher after a U.S.

crackdown in 2023.

These pressures forced Iranian banks to rely more on its own government.

Iran's central bank used an emergency loan program to support the country's banking system.

The loans charged high interest rates, but didn't require banks to provide any collateral.

In order to fund these loans, Iran's central bank printed money, which raised concerns about inflation and the weakening of Iran's currency, the rial.

And the lender that became an emblem of this risky system was called Ayandeh Bank.

So Ayande borrows all this money from the central bank.

What does it do with it?