Iran’s weary bankers, the target of renewed sanctions by the US, Britain and the European Union, appear unsurprised by a financial scandal that is gripping the country. Instead, they see the alleged $2.8bn fraud as rooted in a poor regulatory and supervisory framework and widespread corruption.
“It would be surprising if no corruption happens in the existing banking system,” Hassan Sobhani-Nia, a banking analyst and former parliamentarian, told local media. The cynicism is not surprising.
Iran’s central bank tries to enforce recommendations envisaged in the first two pillars of the Basel accord on capital requirements, and, two years ago, the government of Mahmoud Ahmadi-Nejad, Iran’s president, announced it was embarking on banking reform as part of an economic recovery package. But the authorities have not moved to upgrade the country’s Islamic financial system and any revamping of banking rules to meet international standards has been slow, bankers say.
