Iran's Financial Isolation

Despite its continued bluster on nuclear issues, Iran is discovering that there are costs to be paid for maintaining its confrontational stance. Pressure from Washington to isolate Tehran financially has already succeeded in removing or significantly reducing such major European banks as Credit Suisse and UBS from the Iranian scene. Now several large German institutions are preparing to leave as well. Over the last few months Deutsche Bank and Commerzbank have withdrawn investments. Dresdner Bank has announced it will cancel operations within Iran altogether. It is believed that these banks fear losing U.S. business if they continue to operate in Iran.

The moves, however, have obviously not gone unnoticed in Tehran where Vice Governor of the Iranian Central Bank, Mohammad Jafar Mojarrad, has threatened the German financial institutions with a bar from Iranian business when relations improve. Mojarrad furthermore criticized the U.S. for misusing the Bank system as a tool for military purposes and also warned Germany that there are banks from Asia, Russia and the Gulf region ready to take Germany’s place.