G-20 Revolt? France Gets "Positive Reception" To Challenge US Bank Fines

Tyler Durden's picture

In recent weeks France has defied US demands not to build Mistrals for Russia, has questioned dollar imperialism and the Petrodollar, and has blasted the US banking regulator's fines as "accelerating the decline of the dollar." So it is likely not a huge surprise that ahead of the G-20 meeting of world leaders later in the year, The FT reports, France has gathered support to challenge US regulators imposing heavy penalties on foreign banks. Berlin, London and Rome have backed Paris in its push to have its concerns about so-called US extraterritoriality discussed when leaders of the world’s top 20 economies meet hoping to bring "more proportionality" to bank fines. With allies like this...

 

As The FT reports, top regulators have been raising concerns about the impact of the long procession of fines on their efforts to strengthen banks’ finances.

France has gathered support to challenge US regulators imposing heavy penalties on foreign banks at a G20 meeting of world leaders later this year after the record $8.9bn fine levied on BNP Paribas last month.

 

Berlin, London and Rome have backed Paris in its push to have its concerns about so-called US extraterritoriality discussed when leaders of the world’s top 20 economies meet in Brisbane in Australia in November, according to French and other European officials.

 

...

 

“There should be co-ordination between regulators, as there should not be multiple jeopardy,” agreed one senior European official, who confirmed that there had been “informal discussions” about putting the issue of bank fines on the G20 agenda.

 

“It is an issue, but we have to be careful not to go into an area of saying ‘it is too much and we have got to lay off these guys’,” said the official, who added that the G20 could discuss how to bring more “proportionality” to bank fines.

 

French finance minister Michel Sapin sought support for France’s stance in recent meetings with Wolfgang Schäuble and Pier Carlo Padoan, his German and Italian counterparts, according to French officials. There was a “positive reception”, one said.

 

...

 

In Berlin, officials said Germany had agreed to back Paris, saying it supported a common EU approach to the US over extraterritorial jurisdiction. Berlin sees that a union-wide approach to Washington is more likely to bear fruit than case-by-case discussions.

As a gentle reminder, Brazil, Russia, India, China, and South Africa are all members of the G-20 and, we suspect, would not be too worried backing any such coordinated actions against US extraterritoriality.

However, we leave it to the French to express their anti-dollar-imperialism...

Single whammy:

  • NOYER: BNP CASE WILL ENCOURAGE ‘DIVERSIFICATION’ FROM DOLLAR

Here is the full google translated segment:

Q. Doesn't the role of the dollar as an international currency create systemic risk?

 

Noyer: Beyond [the BNP] case, increased legal risks from the application of U.S. rules to all dollar transactions around the world will encourage a diversification from the dollar. BNP Paribas was the occasion for many observers to remember that there has been a number of sanctions and that there would certainly be others in the future. A movement to diversify the currencies used in international trade is inevitable. Trade between Europe and China does not need to use the dollar and may be read and fully paid in euros or renminbi. Walking towards a multipolar world is the natural monetary policy, since there are several major economic and monetary powerful ensembles. China has decided to develop the renminbi as a settlement currency. The Bank of France was behind the popular ECB-PBOC swap and we have just concluded a memorandum on the creation of a system of offshore renminbi clearing in Paris. We have very strong cooperation with the PBOC in this field. But these changes take time. We must not forget that it took decades after the United States became the world's largest economy for the dollar to replace the British pound as the first international currency. But the phenomenon of U.S. rules expanding to all USD-denominated transactions around the world can have an accelerating effect.

In other words, the head of the French central bank, and ECB member, Christian Noyer, just issued a direct threat to the world's reserve currency (for now), the US Dollar.

 

Double whammy:

  • Total’s de Margerie Sees No Need for Dollars in Oil Purchases

Oil major Total's chief executive Christophe de Margerie was responding to questions about calls by French policymakers to find ways at EU level to bolster the use of the euro in international business following a record U.S. fine for BNP.

"There is no reason to pay for oil in dollars," he said. He said the fact that oil prices are quoted in dollars per barrel did not mean that payments actually had to be made in that currency.

So even a major beneficiary of the status quo appears to see the end in sight for the Petrodollar.

And now The Triple Whammy

  • *FRANCE SAYS INCREASING EURO USE IS ISSUE OF 'GLOBAL BALANCE'
  • *SAPIN SAYS EURO AREA NEEDS TO LEAD DISCUSSION ON DOLLAR USE
  • *FRANCE NOT FIGHTING 'DOLLAR IMPERIALISM,' SAPIN SAYS (wo shy mention it?)

French Finance Minister Michel Sapin says that now is the right time to bolster the use of the euro in transactions outside the U.S. Sapin speaks in an interview with Bloomberg News in Aix-en-Provence, France.

“We sell ourselves aircraft in dollars. Is that really necessary? I don’t think so,” Sapin says, adding "I think a rebalancing is possible and necessary, not just regarding the euro but also for the big currencies of the emerging countries, which account for more and more of global trade."

 

“We can avoid the exchange rate risk, and that’s always useful. We can diminish financing costs in pricing more in other currencies,” Sapin says.

 

“This is not a fight against dollar imperialism,” Sapin says.

 

“It’s up to Europe, to the euro zone in particular, to lead this argument,” Sapin says.

 

As The FT reports, Mr Sapin said he would raise the need for a weightier alternative to the dollar with fellow eurozone finance ministers when they meet in Brussels on Monday, although he declined to go into detail about what practical steps might emerge.

As we joked previously, nope - no anti-dollar-imperialism here at all...

*  *  *

As we showed recently...(and have ever since 2010)... nothing lasts forever

Meanwhile, somewhere Putin is still laughing.

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hedgiex's picture

In the 80s they sold so much toxics to Japanese Banks that they become zombies. Mergers take place amont Japanese Banks. Japan is as one country is more united in keeping the zombies functioning as national symbols.

Now they have less outlets with the Euro Banks to dump their concotions, they raise the bar (regulations) to ensure these muppets recapitalize/bail out with EU taxpayers' monies to raid as fines.

G20 is G Zero and France or whoever cannot co-ordinate a EU reponse.

Why should the little people care with this fight in gangland. These EB Bank muppets anyway still ask for it by still paying in global markets with stressed finance and in a crowded space with a shadow banking sector. If EU is serious with their little people, they should first muzzle their own banksters and put in place a tougher version of Glass-Stegal.

Unpalatable to EC but Deutsche, Barclays and the other self delusional global banks are not there with talents, reach and the Govt backings to play the global markets. They should scramble for what is diminishing back home.

onmail's picture

America destroys those with whom it makes friends.

The Fifth Empire's picture

"America has no friends, only interests"

The Fifth Empire's picture

Identity resides on commom ground

Genes

Language

History

Nations without identity will fade

Jack4952's picture

France is angry by the U.S. government's attempts to stop the sale of French-built Mistral "helicopter carrier ships" to Russia, as well as the $8.97 Billion fine (ordered by a lowly U.S. District Court judge in Manhattan) levied on BNP Paribas bank (of Paris and London) for selling Russian-held U.S. Treasury bonds for gold.

Italy is angry about IMF and EU-imposed "austerity" as well as U.S. atttempts to stop Russia's South Stream natural gas pipeline, one of whise branch lines would be located in Tarvisio, Italy.

Britain is angry at the U.S this past week for the  EU to cut off credit to all Russian state-owned bank, which will deny the state-owned banks VTB Bank OAO, Bank of Moscow and the Russian Agricultural Bank cerdit and access to the US economy. Since Britain's "City of London" banks are the primary lenders to these Russian banks, the British are NOT pleased, to say the least!

Germany is angry about te failure of the NY Federal Reserve to return Germany's physical gold, the adverse effects of U.S. sanctions on the over 3,000 major German companies with facilities in Russia, the potential loss of automobile sales to Russia (Germany's best market for its cars), and the prospect of a regional European war and/or world-wide thermonuclear war. Further, the German people are FED UP with bailing out the ECB and the Mediterranean EU nations.

Turkey is now defying the U.S. by buying OIL from the "rebels" in northern Iraq and its previous purchases of oil from Iran, and paying for that oil in GOLD.

And poor Argentina has been ordered by another lowly U.S. District Court judge to pay the pay "hold-out" bond-holders before it can pay its regular bond-holders.

QUESTION: Just WHO granted the U.S. government JURISDICTION over all of these supposedly SOVEREIGN nations?

Kirk2NCC1701's picture

Who granted them this approval and authority?  Why, GOD did, silly.  The US was/is the new Chosen People:  The Chosen Folks.

You didn't get the Memo?