Fed and Treasury Irate at NY Bank Regulator's Vulgar Display of Public Diligence with Standard Chartered
Courtesy of Jesse's Cafe Americain
Spitzer: If they shut me up, who'll take my place?
Lawsky: I will
The NY Banking regulators clearly do not understand the regulatory 'hands off' philosophy of Treasury and the Fed towards the pampered princes of finance and the privileged few.
This was supposed to have been privately settled amongst gentlemen with a gentle wristslap and a thorough coverup.
And of course this exposes the Federal government and their financerati as utter hypocrites, especially when they are stoking the fires of conflict.
Only the little people are meant to suffer for their country. For the favored few, everything is just another law-bending, money making opportunity.
Some of the wording in this is priceless, especially considering the extent of what the Bank had done and with whom.
I won't be holding my breath for the US regulators to clean up their own manipulated markets and privileged insiders. It might muss someone's ruffled sleeves and Presidential cufflinks.
Liberty and justice -- for some.
Exclusive: Regulators irate at NY action against StanChart
By Carrick Mollenkamp and Emily Flitter and Karen Freifeld
August 8, 2012
NEW YORK/LONDON (Reuters) - The Treasury Department and Federal Reserve were blindsided and angered by New York's banking regulator's decision to launch an explosive attack on Standard Chartered Plc over $250 billion in alleged money laundering transactions tied to Iran, sources familiar with the situation said.
By going it alone through the order he issued on Monday, Benjamin Lawsky, head of the recently created New York State Department of Financial Services, also complicates talks between the Treasury and London-based Standard Chartered to settle claims over the transactions, several of the sources said.
Lawsky's stunning move, which included releasing embarrassing communications and details of the bank's alleged defiance of U.S. sanctions against Iran, is rewriting the playbook on how foreign banks settle cases involving the processing of shadowy funds tied to sanctioned countries.
In the past, such cases have usually been settled through negotiation - with public shaming kept to a minimum.
In his order, Lawsky said Standard Chartered's dealings exposed the U.S. banking system to terrorists, drug traffickers and corrupt states.
But the upset expressed by some federal officials, who were given virtually no notice of the New York move, may provide ammunition for Standard Chartered to portray the allegations as coming from a relatively new and over-zealous regulator...
Read the rest here.
Larry Doyle's take - Crime Pays, a lot.
If in fact — and as reported — the UK-based Standard Chartered Bank is fined a token $700 million for the violation of American sanctions in dealing with Iran, then we are left with only one conclusion: CRIME PAYS. (A second conclusion would be that our regulators and government officials are in the pockets of the banks BUT we already knew that.)
There are allegedly $250 billion worth of transactions in question in this Standard Chartered scandal. A slap on the wrist of $700 million would equate to less than .3 of 1% (.003) for dealing with the crowd that would like to see Israel obliterated.
Is this a joke? What do you think the profit margins were in the business transacted by Standard Chartered with their friends in Iran? Certainly a LOT more than than .003.
With new and explosive scandals becoming regular occurrences, the underside of the financial industry on both sides of the pond is being exposed like never before. How do the shareholders of Standard Chartered feel as the value of their holdings plummet?
Once again, we learn that the real risks in the marketplace go far beyond basic market risks. The greatest risk of all is getting overrun by a situation in which our financial regulators fail to perform. Chirantan Barua, an analyst at Sanford Bernstein, is quoted in the WSJ this morning and gets the award for the greatest understatement of our entire economic crisis,
“These scandals [don't] reflect well on the regulators who are becoming a global laughing stock.”
No doubt about that but the lives impacted and well beings destroyed are no laughing matter.
Related Sense on Cents Commentary:
Standard Chartered: Friends Like This, Who Needs Enemies