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| Syria-Lebanon-Iran |
| Lending Dries Up in Iran |
| 2008-01-21 |
| Various industries in Iran are beginning to feel the pinch as bankers around the world have cut back lending to satisfy the U.S. governmentÂ’s demands. U.S. efforts to halt IranÂ’s uranium enrichment program stalled in the United Nations, thwarted by Russia and China. But U.S. Treasury officials Stuart Levey and Robert Kimmitt have spearheaded a campaign to curb lending to a country the United States perceives as a global threat. Banks such as UBS AG (UBS), Deutsche Bank AG (DB), and HSBC Holdings PLC (HBC) have taken heed, reducing lending to Iran, and in some cases, cutting it off all together. "We do absolutely no business in Iran," Serge Steiner, a spokesman for UBS, EuropeÂ’s biggest bank by market value, told Bloomberg News. Deutsche Bank, GermanyÂ’s largest financial institution, said in July that it was retreating from Iran as well. "We have sent a letter to private clients in Iran who have an account with Deutsche Bank in Germany, and told them that we have to terminate our business relationship with them," Deutsche Bank spokesman Ronald Weichert said last year. Iran is indeed an oil rich nation. It ships about four million barrels of crude a day and accounts for 5% of global supply. But an unnamed German banking analyst told Forbes that Deutsche BankÂ’s interest in the Iranian oil business was inconsequential. "I think leaving Iran improves the business opportunities [for Deutsche Bank]," he said. "Iran is a small country. ItÂ’s not worth it to deal with Iran and then lose business in the U.S." Six months ago, the Organization for Economic Cooperation and Development cut IranÂ’s country-risk rating for export credits to the second worst level. It now shares a category with Albania, Bangladesh and Mozambique. The number of banks doing business with Iran has dropped substantially in the past two years. According to BankersÂ’ Almanac, the number of institutions used by Bank Saderat Iran, one of the countryÂ’s largest banks, have fallen from 29 in 2006 to 8. The result of such precautionary measures has been detrimental to Iranian business, which has been deprived of funds necessary to acquire equipment and services. European Union data agency Eurostat reported that machinery and transportation equipment exports to Iran dropped 20% in the first nine months of 2007 from the previous year. Financial institutions are in the midst of a global credit crunch and most are shying away from riskier investments. That doesnÂ’t bode well for Iran, which lacks the technology and equipment to develop its natural resources on its own. Without foreign investment, Iran is an island. "Banks tend to be very, very conservative creatures," Peter Djinis a former member of the TreasuryÂ’s Financial Crimes Enforcement Network told Bloomberg. Until they hear directly from the U.S. government that Iran can be trusted, "there will not be any wavering." |
| Posted by:Pappy |
| #3 ItÂ’s not worth it to deal with Iran and then lose business in the U.S." Wut? That's BS, Irans GDP is bigger than Conneticuts. |
| Posted by: Shipman 2008-01-21 17:42 |
| #2 I have this mental image of payday on Friday at their plant, Okay you get either one goat, three piglets and a chicken, or you can change the piglets for two chickens apiece, or four piglets for the goat, loose change is given in eggs. |
| Posted by: Redneck Jim 2008-01-21 14:41 |
| #1 Gosh, it seems that the Bush plan is working. How very odd! ;-) |
| Posted by: trailing wife 2008-01-21 11:45 |