White House: No taxpayer cash to bail out Afghan bank

WASHINGTON — The US Treasury Department denied media reports Saturday that American taxpayer funds would be put towards bailing out Afghanistan's beleaguered Kabul Bank.

The White House said the allegations were not true and pointed to a statement from Deputy Treasury Secretary Neal Wolin that said the bank's troubles were "an Afghan issue."

"They are taking immediate steps to ensure the stability of Kabul Bank and to protect the financial assets of the Afghan people," Wolin said.

"While we are providing technical assistance to the Afghan Government, no American taxpayer funds will be used to support Kabul Bank," he said.

In Afghanistan meanwhile government officials Saturday were seeking to head off a run on the country's biggest bank, reassuring customers of Kabul Bank that their money was safe, following corruption allegations in US newspapers.

The privately-owned bank has been the subject of reports alleging large-scale corruption by executives, though the government and central bank have said it is solvent and there is no need for customers to panic.

The Washington Post said on Friday that the US Treasury Department had dispatched a team to Kabul to help deal with the crisis, and said that a brother of Afghan President Hamid Karzai had called for Washington's intervention.

The influential conservative website Drudge Report earlier ran a story titled "American Taxpayers to Bailout Afghan Bank?"

The New York Times meanwhile said that deals were being made with the Central Bank of Afghanistan to aid the bank.