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Standard Chartered diverges from other bank scandals
A man smokes outside the Standard Chartered bank's offices on August 7, 2012 in London, England.
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Jeff Horwich: The scandal over British bank Standard Chartered is taking some interesting turns. This week New York's financial regulator charged the bank with concealing transactions for Iranian clients -- breaking U.S. sanctions against Iran. Standard Chartered could lose its New York license, which would be devastating.
The affair is diverging from the storyline of other recent British banking investigations. Here with more is Christopher Werth, covering the story for us from London. Hello, Christopher.
Christopher Werth: Hey, good morning.
Horwich: In these other recent scandals we’ve had instant resignations at Barclays, complete contrition from HSBC -- not here, sounds like Standard Chartered is coming out swinging?
Werth: Yeah, it would seem so. I want to play you two clips to just illustrate how bold an approach Standard Chartered is taking.
First one, here’s HSBC’s former compliance head, David Bagely, speaking in front of the Senate just last month after money laundering allegations against it.
David Bagely: HSBC has fallen short of our own expectations and the expectations of our regulators.
And here’s Peter Sands, the CEO of Standard Chartered speaking to the Financial Times yesterday about the money laundering allegations it’s facing.
Peter Sands: We were very surprised by the announcement by the New York Department of Financial Services on Monday. And we strongly reject both the position and the facts, the portrayal of the facts made by the DSF.
So two very different responses there, Jeff. Standard Chartered is denying the scale of the wrongdoing it’s been accused of. And it appears the bank is considering taking legal action against the New York regulator for reputational damage.
Horwich: And what’s been the reaction there in London to all of this? To U.S. regulators cracking down on these British banks?
Werth: Yeah well, I have to say, the mood here is getting rather defensive. There’s a general suspicion that overzealous American regulators are trying to prove their mettle in the U.S., and are taking it out on British bankers.
The mayor here in London, Boris Johnson -- you may have seen photos of him recently, dangling from a wire at an Olympic event -- he’s very protective of the banking sector in London -- rightfully so. He accuses U.S. regulators of begin “motivated by jealousy” of London as a global financial center.
Horwich: Christopher Werth for us in London. Thanks a lot.
Werth: Hey, thanks.
Standard Chartered has big problems ahead of it because for one the settlement they already did was for state charges. They still have federal charges, probably charges from other countries and there care going to be shareholders and investors looking to sue because of the damage, the money laundering scandal has caused the bank.
> overzealous American regulators are trying to prove their mettle in the U.S.,
> and are taking it out on British bankers.
Translation: By Jove, they're actually trying to REGULATE us! Cheeky Yanks. Who do they think they are, regulatory officials or something? Next thing you know, they'll be -- *gasp* -- actually doing their jobs! If we give in, they'll think they should treat ALL banks this way!
About time, that's all I have to say. These guys don't make random accusations -- they have to find the money to pursue stuff like this, and they believe they have a case. You're innocent until proven guilty (or at least until you can pay enough to enough lawyers to find a better loophole), but you're gonna have to open the books and they're going to look real hard at those fancy transactions. And you've got some explaining to do. In public.
Get used to it, bankers. Party's over.
