"This is a sign that the Biden administration recognizes the enormity of the humanitarian crisis in Afghanistan but feels constrained in addressing it due to concerns about political optics at home. The legal basis for using a portion of the Afghan central bank's reserves to compensate 9/11 victims is unclear, especially considering that a portion of the frozen assets belong to private Afghan citizens and firms."
"The seizure of these assets undermines the stabilizing role of the US Federal Reserve in the global financial system and will undercut the confidence some foreign governments have in keeping funds in U.S. financial institutions. As for the portion that would go into trust fund for humanitarian relief, there is massive need, but a bigger need is to resolve the financial crisis exacerbating the situation and address impediments to legitimate financial flows into the country."
