The Bank Collapse Behind Iran's Protests - The Journal Recap

Podcast: The Journal

Published: 2026-01-15

Duration: 20 minutes

Guests: Jared Malsin

Summary

Iran's recent protests were triggered by a financial crisis, exacerbated by the collapse of Allande Bank, which highlighted the broader economic instability under severe sanctions.

What Happened

Iran is experiencing its most significant challenge since the 1979 revolution, with widespread protests resulting from a severe financial crisis. The collapse of Allande Bank, a major lender heavily reliant on Iran's central bank, signaled a deeper systemic failure within Iran's financial infrastructure. This crisis is rooted in 2018, during President Trump's term, when renewed sanctions isolated Iran's economy and cut off its banking system from the rest of the world.

Iran's banks, unable to participate in international transactions, relied on emergency loans from the central bank, which printed money and heightened inflation. Allande Bank, formed by Ali Anzari, was emblematic of the financial mismanagement, as it funneled government-backed loans into extravagant real estate projects like the Iran Mall.

The financial strain was compounded by a short-lived conflict with Israel, which further drained Iran's resources and caused a currency crisis. Iranians, anxious about the future, began converting their savings into more stable currencies, leading to significant capital flight and a sharp devaluation of the Rial.

The closure of Allande Bank in October 2025 exacerbated the crisis, with the government left to cover its debts and forced to announce severe austerity measures, including cuts on essential subsidies. These measures were the tipping point for widespread protests, involving a cross-section of Iranian society, including traditionally conservative regions.

The Iranian government responded with a heavy crackdown, resulting in thousands of deaths and arrests, while imposing a communications blackout to control the narrative. The protests reflect deep-seated frustration over economic mismanagement and the isolation imposed by international sanctions.

The episode concludes with uncertainty about Iran's future, as the government struggles to maintain control amidst profound economic and social unrest. The protests have highlighted the precarious balance Iran must maintain between international pressure and domestic stability.

Key Insights

• The collapse of Allande Bank in October 2025 marked a significant failure in Iran's financial system, leading to severe austerity measures and widespread protests.
• Iran's central bank printed money to provide emergency loans to banks cut off from international transactions due to renewed sanctions in 2018, resulting in heightened inflation.
• The financial crisis in Iran was exacerbated by a currency crisis, as citizens converted their savings into stable currencies, causing capital flight and a sharp devaluation of the Rial.
• The Iranian government's response to the protests included a heavy crackdown with thousands of deaths and arrests, alongside a communications blackout to control the narrative.