The Bank Collapse Behind Iran's Protests

Summary

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The Journal.: "The Bank Collapse Behind Iran's Protests"

Date: January 15, 2026
Hosts: Jessica Mendoza, Ryan Knutson
Guests/Sources: Jason Bellini, Donald Trump (audio clip), Iranian officials & analysts

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Episode Overview

This episode investigates the underlying financial crisis that triggered Iran's largest wave of protests since the 1979 revolution. Moving beyond the familiar narratives of political or civil liberties, the hosts detail how the collapse of a major Iranian bank, Ayande Bank, combined with years of international sanctions, culminated in catastrophic economic turmoil and unprecedented civil unrest.

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Key Discussion Points & Insights

1. The Immediate Crisis and Its Uniqueness

• Revolutionary Atmosphere:

  • "Iran is facing a kind of revolutionary situation. This is the most significant challenge that the regime in Iran has faced since it came into existence after its last revolution in 1979."
    — Jason Bellini [00:13]

• Economic Driver of Protest:

  • Unlike Iranian flashpoints in the past, this crisis is not fundamentally about politics or civil liberties, but "stems mainly from a major financial crisis." — Jessica Mendoza [01:13]

2. Sanctions and Financial Isolation

• Impact of U.S.-Led Sanctions (2018):

  • Trump's withdrawal from the nuclear deal (JCPOA) and "the highest level of economic sanction" further severed Iran from international finance. [03:54–04:18]
  • Iran got "cut off from the swift payment system" and most international trade, making its economy extremely reliant on internal state controls. — Jason Bellini [04:35, 04:55]

• Government Workarounds and Their Limits:

  • Iran attempted to prop up its banking system via opaque oil sales and using banks in Iraq, but these workarounds failed after renewed U.S. pressure in 2023.
    — Jessica Mendoza [05:19]

3. The Central Bank’s Risky Role

• Heavy State Intervention:
  • By 2019, about 70% of Iranian banks were state-controlled (per a former IMF official).
  • The central bank employed emergency loans with high interest and no collateral, funded by printing money—leading to rampant inflation. — Jessica Mendoza [06:26]

4. Ayande Bank: The Collapse's Epicenter

• Founding and Business Model:

  • Founded in 2013 by Ali Ansari, Ayande Bank offered elevated interest rates and depended on the central bank. [06:53]
  • The bank primarily funneled funds into elite-connected real estate projects, especially the extravagant "Iran Mall."
    • "It's sort of like a city within a city." — Jason Bellini [07:44]

• Self-Dealing and Alleged Corruption:

  • Ansari directed bank funds toward his own companies/projects; officials later likened the bank to a "Ponzi scheme."
    • "Allende bank was operating a Ponzi scheme... they were loaning out more money than they could possibly repay." — Jason Bellini [08:30]

5. External Shocks and Escalation

• 2025 War with Israel:
  • Israeli strikes and subsequent brief conflict forced Iran to increase military spending, further straining finances.
    • "Money was leaving the country and Iranians themselves were taking their money out of the national currency, the rial." — Jason Bellini [10:22]
  • Result: Estimated $10–20 billion capital flight; the rial lost 84% of its value in a year.

6. Government Response and Public Fallout

• Ayande Bank Shutdown and Aftermath:

  • The central bank shut Ayande in October 2025; its founder blamed government policies.
  • The government inherited its debts, compounding fiscal crisis and leading to drastic budget cuts, including the removal of bread and gasoline subsidies.
    • "When you're talking about cuts on subsidies to bread and gasoline, like, those are things that are going to really hit ordinary people hard." — Jason Bellini [14:18]

• Trigger for Mass Protests:

  • Austerity measures totaling $10 billion in subsidy cuts pushed people into the streets.
    • "That was really the immediate trigger of these protests..." — Jason Bellini [15:04]
  • Unprecedented cross-sectarian participation, including traditionally regime-supporting regions.

7. Human Cost and Government Crackdown

• Scale of Protests and Repression:

  • Merchants, ethnic minorities, and religious conservatives protested.
  • Government responded with severe force; >2,600 confirmed deaths, >18,000 arrests.
    • "There's been this very deadly, very concerning crackdown on protesters where you've had hundreds, if not thousands of people killed." — Jason Bellini [16:36]

• Communications Blackout:

  • Near-total internet shutdowns hinder outside reporting on numbers and events.

8. Was the Crisis Inevitable?

• Analyst Viewpoints:

  • Many analysts say the crisis was precipitated by the government's own actions: banking system weakness, international isolation, war expenditures.
  • "Iran's government drove itself into a perfect storm of factors that caused this crisis, where you have this underlying banking crisis and a weak financial system, a war with a more powerful neighbor. And then a lot of Iranians are looking at this situation saying, okay, what was all this money spent on? Like, what was the point of all this?"
    — Jason Bellini [18:26]

• Final Note on Uncertainty:

  • "What comes next is completely uncertain and unpredictable."
    — Jason Bellini [19:01]

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Memorable Quotes & Timestamps

• On the uniqueness of this moment:

  • "This is the most significant challenge that the regime in Iran has faced since it came into existence after its last revolution in 1979."
    — Jason Bellini [00:13]

• Explaining the central driver:

  • "[T]he unrest stems mainly from a major financial crisis."
    — Jessica Mendoza [01:13]

• On Ayande Bank's role:

  • "Allende bank was operating a Ponzi scheme. That is to say they were loaning out more money than they could possibly repay."
    — Jason Bellini [08:30]

• On capital flight and inflation impact:

  • "The rial fell roughly 84% over the course of the year."
    — Jason Bellini [10:22]

• Everyday impact:

  • "People had no idea how to put prices on their menus. Because when you have a currency that's declining every single day and every single hour, people don't even know how much to charge for things."
    — Jason Bellini [13:20]

• Government cuts’ political consequence:

  • "When you're talking about cuts on subsidies to bread and gasoline, like, those are things that are going to really hit ordinary people hard."
    — Jason Bellini [14:18]

• Severity of crackdown:

  • "There's been this very deadly, very concerning crackdown on protesters where you've had hundreds, if not thousands of people killed."
    — Jason Bellini [16:36]

• Looking forward:

  • "What comes next is completely uncertain and unpredictable."
    — Jason Bellini [19:01]

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Important Segment Timestamps

• [00:13] – Setting the stage: biggest threat to the regime since 1979
• [03:47] – Roots of the crisis: U.S. sanctions and the nuclear deal's collapse
• [06:53] – Ayande Bank's risky business model and corruption
• [09:24] – The economic impact of the 2025 Iran-Israel conflict
• [11:04] – Ayande Bank shuttered; intensifying public pressures
• [13:12] – Daily impact: grocery prices, vanishing livelihoods
• [14:18] – Austerity budget and subsidy cuts
• [15:35] – Too little, too late: government’s attempted relief
• [16:36] – Brutal crackdown and the mounting death toll
• [17:07] – Communications blackout, lack of reliable information
• [18:26] – Was this crisis inevitable?

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Summary

This detailed account reveals how systemic financial mismanagement, exacerbated by international sanctions and war, led not only to the collapse of Iran's banking system but also to the largest uprising in modern Iranian history. The episode illustrates the domino effect of financial isolation and elite corruption, the hardships of ordinary Iranians whose daily lives became untenable, and a government's ultimate failure to contain or pacify a population driven to desperation. The events raise fundamental questions about sovereignty, accountability, and the prospects for change in one of the world’s most isolated economies.

Transcript

[Jason Bellini]

Iran is facing a kind of revolutionary situation. This is the most significant challenge that the regime in Iran has faced since it came into existence after its last revolution in 1979.

[Jessica Mendoza]

Our colleague Jared Malson covers the Middle east and he's been following the unrest in Iran for the past two weeks.

[Jason Bellini]

There have been enormous protests throughout the country and there's been a very severe crackdown in which hundreds if not thousands of people appear to have been killed in the last few days. And you're seeing a very real risk that the regime could fall out of power. And everyone is holding their breath to see what's going to happen next.

[Jessica Mendoza]

Unlike other flashpoints in the country's history, the biggest factor in the unraveling situation in Iran today is isn't political instability or demands for more personal freedom. Instead, the unrest stems mainly from a major financial crisis.

[Jason Bellini]

Iran has obviously been under international U S led sanctions for many years, which means its economy is under severe strain. That totally isolates Iran, cuts off the banking system from the rest of the world and has put it in this very unstable situation to begin with.

[Jessica Mendoza]

And the first sign that Iran had reached a turning point was the failure of a bank.

[Jason Bellini]

One of the largest banks in Iran collapsed and that was a warning sign that the entire financial system was in crisis.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Thursday, January15. Coming up on the how the collapse of a bank sent Iran into a tailspin.

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[Jessica Mendoza]

Iran's current financial crisis has its roots in 2018 during President Trump's first term.

[Donald Trump]

I am announcing today that the United States will withdraw from the Iran nuclear deal.

[Jessica Mendoza]

The Iran Nuclear deal brokered by the Obama administration was meant to curb the country's nuclear program in exchange for sanctions relief. Trump reversed course and took a hard line against Iran.

[Donald Trump]

We will be instituting the highest level of economic sanction. Any nation that helps Iran in its quest for nuclear weapons could also be strongly sanctioned by the United States.

[Jason Bellini]

That cut off Iran from the world financial system and made it this kind of closed system, almost where it was very, very isolated, and it put its financial system under a lot of strain.

[Jessica Mendoza]

The renewed sanctions meant that Iran's banks couldn't do business with the outside world.

[Jason Bellini]

For example, it is cut off from the swift payment system. The central bank is under sanctions. Several other Iranian banks are under sanctions. So this is a country that cannot borrow internationally, it cannot do trade normally, it cannot sell its oil freely, and it is deeply, deeply isolated.

[Jessica Mendoza]

To put it simply, money stopped flowing into Iran's banks. In the years that followed, the Iranian government came up with workarounds to try to keep its economy afloat. For example, Iran's oil industry has had to increasingly rely on a so called shadow fleet of tankers to export oil abroad. That kept some money flowing to the state's coffers. Iran also used a workaround for its banks, turning to banks in Iraq for access to cash. But that practice became a lot tougher after a US crackdown in 2023. These pressures forced Iranian banks to rely more on its own government.

[Jason Bellini]

And that created a situation where you have the central bank propping up this entire system. Something like 70% of Iran's banks were government controlled to some degree. That's according to an analysis by a former IMF official that I spoke to. By 2019, which is when things started to come apart at the seams, Iran's.

[Jessica Mendoza]

Central bank used an emergency loan program to support the country's banking system. The loans charged high interest rates, but didn't require banks to provide any collateral. In order to fund these loans, Iran's central bank printed money which raised concerns about inflation and the weakening of Iran's currency, the rial. And the lender that became an emblem of this risky system was called Ayande Bank.

[Jason Bellini]

Right. So Allende bank is a microcosm of these compound economic problems. It is a bank that was formed in 2013 by a guy named Ali Ansari, who is from what's believed to be one of Iran's richest families. He's close to the conservative establishment and he founded this bank that offered the highest interest rates on the market. And it was also heavily dependent on the Central Bank.

[Jessica Mendoza]

So Allende borrows all this money from the central Bank. What does it do with it?

[Jason Bellini]

Well, what the bank was doing is that it was basically acting as a kind of piggy bank for these lavish real estate projects, especially malls.

[Jessica Mendoza]

Malls, like shopping malls?

[Jason Bellini]

That's right. In particular, this one huge mall called the Iran Mall, which is in northwest Tehran and is believed to be one of the largest shopping complexes in the world. It has a hall of mirrors that is modeled after a Persian imperial palace. It has a car showroom, it has movie theaters, it has a library, you know, so it has like, you know, sports complexes. It's sort of like a city within a city.

[Jessica Mendoza]

But here's the thing. The Iran Mall was built by the same guy who founded Ayanda Bank, Ali Ansari. So by investing in the Iran Mall, Ansari's bank was effectively lending money to his own company, money that came from the Iranian government.

[Jason Bellini]

You have this bank that's like acting almost like a slush fund to fund this kind of garish shopping center that was a symbol of how these regime connected elites are just moving this money around to enrich themselves. What one of the senior officials at the Iranian Central bank said last year is that Allende bank was operating a Ponzi scheme. That is to say they were loaning out more money than they could possibly repay. And that's what you have in a Ponzi scheme, where you have a bank that is giving out loans that it cannot repay essentially and playing a shell game by moving that money around.

[Jessica Mendoza]

The whole system started to unravel last year when Iran was hit with another major crisis.

[Jason Bellini]

We start with the breaking news at this hour as Israel has carried out strikes on Iran's nuclear program.

[Jessica Mendoza]

Last June, Israel bombed military facilities in Iran and kicked off a 12 day war. Iranian missiles targeted multiple cities in Israel overnight. With bat yam hit the hardest.

[Donald Trump]

Last night, a fleet of American warplanes flew halfway around the and dropped more than a dozen 30,000 pound bombs on Iran's main nuclear facilities.

[Jessica Mendoza]

While the conflict was short lived, it was a huge blow to Iran's economy. The Iranian government had to increase its military spending to rebuild destroyed air defenses and stock up on missiles, which added to the strain on the country's funds. And the war also had an impact on Iranians themselves. It made them really anxious, anxious that there could be more attacks and that the economy would tank.

[Jason Bellini]

Money was leaving the country and Iranians themselves were taking their money out of the national currency, the rial. They're dumping the rial they're putting it in gold, in dollars, in euros. One economist that I spoke to estimated that between 10 and $20 billion in capital flight took place last year. And it triggered this currency crisis. The rial fell roughly 84% over the course of the year. So it just heaped more pressure on a system that was already under a lot of stress.

[Jessica Mendoza]

The currency crisis put a target on Ayanda Bank. Some politicians worried for years that Iran's central bank was printing too much money to support Ayande at a time when inflation was soaring. Now they wanted it closed. In October, the central bank announced that Ayande would be shut down. In a statement, Ayanda Bank's founder, Ali Anzari, blamed the bank's failure on, quote, decisions and policies made beyond the bank's control. Days after the collapse, the United Kingdom sanctioned Ansari, calling him a, quote, corrupt Iranian banker and businessman. Ayanda bank had reached its end, but for the Iranian government, the crisis was just beginning. That's.

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[Jessica Mendoza]

After the collapse of Ayanda at the end of 2025, how bad was the Iranian economy? What did it look like for everyday Iranians?

[Jason Bellini]

It was bad. You know, when you have a currency that loses 84% of its value in one year, your ability to go buy groceries is going to collapse. I mean, one example that someone gave me is that the restaurants and shop that people had no idea how to put prices on their menus. Because when you have a currency that's declining every single day and every single hour, people don't even know how much to charge for things. Like, it's cheaper not to even open your Shop if you're just going to lose money on the energy and on the stocking your shelves and so on.

[Jessica Mendoza]

The collapse of Ayanda bank made things even worse. The bank left behind a massive pile of debt that became the responsibility of the Iranian government, which was already strapped for cash. In December, the government announced that it would be making serious budget cuts.

[Jason Bellini]

The government, led by President Pozoskyan, introduced this budget at the end of December that was essentially going to remove subsidies on bread, for example, on gasoline. And it pointed to the fact that the government was out of money. When you're talking about cuts on subsidies to bread and gasoline, like, those are things that are going to really hit ordinary people hard.

[Jessica Mendoza]

These proposed austerity measures added up to a $10 billion cut in subsidies for many Iranians. This was the last str.

[Jason Bellini]

That was really the immediate trigger of these protests because the government had to come out and say in numbers, okay, we have to cut back. We have no other choice.

[Jessica Mendoza]

Hundreds of merchants who don't typically join mass protests took to the streets of Tehran. In an effort to mollify protesters, the government introduced a monthly cash subsidy of 10 million riyals per person. That's the equivalent of about US$7.

[Jason Bellini]

But it's sort of too little, too late. They're trying to fight a fire that has already consumed them.

[Jessica Mendoza]

Can you talk about the scale of these protests, how they grew in the past few weeks?

[Jason Bellini]

Right. So they have spiraled to pull in a wide cross section of Iranian society. You had protests in cities across the periphery, in all kinds of regions, in Balochistan and the Kurdish areas, into Iran itself. Very importantly, these protests in the city of Mashhad, which is more religious, more conservative, which shows that some of the core constituents that would normally support the system as a whole, support the Islamic Republic, that those people are protesting. That is why it is a situation that is challenging the system as a whole.

[Jessica Mendoza]

And how has the Iranian government responded?

[Jason Bellini]

They have also launched a crackdown. There's been this very deadly, very concerning crackdown on protesters where you've had hundreds, if not thousands of people killed. And you've seen the videos circulating that we've reported also of the bodies piling up in morgues. And that's what our newsroom is focused on now, is trying to figure out how many people were killed, how many people died.

[Jessica Mendoza]

Human rights activists in Iran, a watchdog group, said it confirmed the deaths of more than 2,600 people and more than 18,000 arrests. Officials in the region have said they'd seen A drop in protest activity recently, and residents reported an eerie quiet after days of violence. But it's hard to tell exactly what's happening because the Iran government has imposed a near total communications blackout. There's virtually no Internet access in the country at all.

[Jason Bellini]

We're going to get the story out eventually, and we're going to find out just how many people are dead in what looks to be one of the worst, most lethal acts of political mass killing in recent years.

[Jessica Mendoza]

For days, President Trump has threatened to take action against Iran if it killed protesters. On Wednesday, he said that Iran had stopped killing people. You mentioned several times that a lot of what happened in the last year and what led ultimately to what's going on now and what happened in December. It's a story of what happens when a country is totally isolated, especially financially. Was this inevitable? Was there anything the Iranian government could have done to prevent this from happening?

[Jason Bellini]

That's a great question. I think, you know, what a lot of analysts have said is that Iran's government drove itself into a perfect storm of factors that caused this crisis, where you have this underlying banking crisis and a weak financial system, a war with a more powerful neighbor. And then a lot of Iranians are looking at this situation saying, okay, what was all this money spent on? Like, what was the point of all this?

[Jessica Mendoza]

And meanwhile, Right, they can't afford bread.

[Jason Bellini]

Yeah, exactly. And then, you know, it's just part of how a country like this stays afloat is ordinary people participate in the economy. You know, like you. You go to work every day, you go to school, you open your shop. And if you can't do that anymore, that's when that starts to come apart at the seams. What comes next is completely uncertain and unpredictable.

[Jessica Mendoza]

That's all for today. Thursday, January 15th. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode from David S. Cloud and Benoifah Khan. Thanks for listening. See you tomorrow.