James Moore: After US attack on City, maybe our regulators should target Wall Street
Outlook Oh dear. It seems America's financial cops have swooped on another British bank, although you won't see many Team GB tops at Standard Chartered's HQ if its repeated threats to hop it for sunnier, less regulated, climes are anything to go by.
Allegations the bank cocked a snook at US sanctions in pursuit of millions of dollars, pounds, dinars, whatevers in fees from some decidedly unpleasant parts of the world (Myanmar, Sudan, Iran) have been greeted across the Pond with the sort of glee usually reserved for Michael Phelps' performances in the pool.
The City's cheerleaders are going to wish StanChart had fled these shores when chief executive Peter Sands last threw a hissy fit about British regulators curtailing his plans for his pals' bonuses.
Because, despite its relationship with its home country being lukewarm at best, it is as British as Jessica Ennis in American eyes today. It has conveniently confirmed their view of London's financial centre as a pirate's paradise, even if its sins were committed Stateside.
Critics from US Treasury Secretary Tim Geithner downwards can only be egged on by the language used in the devastating report by the New York State Department of Financial Services. The bank has left the good old US of A vulnerable to "drug kingpins, weapons dealers and corrupt regimes".
These guys clearly wish they were swinging into its offices armed to the teeth with the theme from CSI blaring out of nearby loudspeakers. Well, we all like a bit of Hollywood.
Let's be clear here. If even half of what the report alleges is true, StanChart has been about as stupid as it's possible to be. "You f***ing Americans. Who are you to tell us, the rest of the world, that we're not going to deal with Iranians?" its group executive director (another banker of very little brain) is alleged to have said. The people who can shut your US office down, that's who. StanChart has long portrayed itself as different to the rest of the UK banking industry, with its enviable financial strength, leading positions in most of the world's best growth economies, and profits throughout the financial crisis.
But it isn't. The "world's best bank" has succumbed to the same hubris that has infected the rest of the industry like a bad case of winter vomiting. The sort of thing that allowed Barclays traders to try fixing Libor interest rates: Look, our investment bank is a driver of economic growth. Or allowed HSBC to deal with Mexican drug lords: If it hits profit targets who cares about compliance?
Or let JPMorgan give its traders a licence to lose billions, while throwing pots of lobbying money at derailing regulatory reform. Or permitted a Goldman Sachs trader to construct a portfolio of derivatives on the advice of a hedge fund that was betting against them.
Of course, the latter two are American banks, and Barclays has been dominated by Americans for a long time. As for the bonus culture that was so instrumental in the genesis of so many of these scandals? You've guessed it: Made in America.
In reality, these are all transatlantic scandals which require transatlantic solutions. But Mr Geithner and friends would much rather puff out their chests and slap London around.
While the US has been rather good at jailing those involved in white-collar crime (much better than we have), there haven't many bankers in orange jumpsuits making perp walks from Wall Street to Rikers Island. Should we now raise the question about who exactly would benefit the most from London's financial centre being brought down a peg or two? This shouldn't read like an exoneration of Standard Chartered or what it was up to. But it's naive to think Wall Street has all of a sudden become an example of the way things should be done.
Come to think of it, someone might like to ask what's going on in its dark corners while Britain's American critics are joining hands to sing "London's burning"? Perhaps Martin Wheatley and his new Financial Conduct Authority might like to make a name for themselves by taking a look.
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