France goes into battle with US over BNP Paribas fine

French government has expressed its anger at reports the US authorities are planning to slap a $10bn fine on one of its major banks

Economics Editor

The French government has expressed its anger at reports the US authorities are planning to slap a $10bn fine on one of its major banks, escalating a transatlantic row that now threatens to sour this week's 70th anniversary commemoration of the D-Day landings.

Laurent Fabius, France's foreign minister, said the mooted fine on BNP Paribas as a punishment for allegedly violating American trade sanctions by the US justice department would not be “reasonable” and could imperil a landmark free trade deal between America and Europe.

The Élysée Palace confirmed that François Hollande will raise the matter with Barack Obama when the American President visits Normandy this week for the commemoration of the Second World War turning point. The French President is reported to have telephoned the White House to raise his concerns and French officials are said to have already pressed the State Department and the US Treasury on the subject in private.

“The fine has to be proportionate and reasonable. These figures are not reasonable” said Mr Fabius on French television. He added that such a penalty would be “an example of a unilateral and unjust decision” and “a serious and grave problem”, which could jeopardise the transatlantic trade partnership currently being negotiated between the EU and the US.

Mr Fabius also noted that a fine of that size, which would represent one of the largest regulatory financial penalties ever imposed on a financial institution and a sum more than twice the size of BNP's profits last year, would reduce the bank's capital buffer and crimp lending to the French economy.

HSBC was fined $1.97bn in 2012 for laundering money for Mexican drug cartels through its American outlets. The same year Standard Chartered was fined $667m for breaking US sanctions on trading with Iran. Credit Suisse last month pleaded guilty to helping Americans evade income taxes and agreed to pay a $2.6bn fine.

BNP stands accused of doing business with entities associated with sanctioned countries including Iran, Sudan and Cuba and of stripping information from wire transfers so they would not be detected by American regulators. In April the bank said it had provisioned just $1.1bn for any fines arising from regulatory violations.

BNP's share price has shed some 10 per cent this year. Today it closed down 0.33 per cent at €50.91.

Coincidentally, the European Securities and Markets Authority (ESMA) censured the American credit rating agency Standard & Poor's for accidentally announcing in 2011 that France's credit rating had been downgraded.

This represents the first time that the Paris-based European Union watchdog has publicly reprimanded a firm since being given the power to regulate EU credit rating agencies in 2012. ESMA did not, however, impose a financial penalty.

The agency said that the episode, in which subscribers were sent an email titled “France (Republic of) (Unsolicited Ratings): Downgrade” was a result of “control failures” by the agency. S&P did, in fact, strip France of its AAA credit rating the following year.

Restricted lending: Banks get tough

Royal Bank of Scotland has followed Lloyds Banking Group’s move in introducing caps on the amount of cash it will lend to high-value mortgage borrowers.

It said from later this month it will restrict RBS and NatWest customers applying for £500,000 or more to a loan of four times their income.

The bank said the move – which matches Lloyds’ decision last month and is set to be followed by the other big lenders – will affect 2.6 per cent of its London mortgage lending and just 0.5 per cent of lending outside the capital.

A spokesperson for RBS and NatWest said: “We are focused on looking after the interests of our customers and ensuring that they only take on mortgage lending that they can afford.”

Simon Read

Start your day with The Independent, sign up for daily news emails
David Silva strokes home his and City's second goal
Arts and Entertainment
a clockwork orange, stanley kubrick
The Tesco Hudl2: An exceptional Android tablet that's powerful, well-built and outstanding value

Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Life and Style
food + drinkAuthor DBC Pierre presents his guide to the morning after
Life and Style
food + drink
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas