Bank of England Governor Mervyn King has criticized New York regulators for publicizing its money laundering accusations against Standard Chartered.
He says other regulators haven’t completed their own investigations of the bank, and characterized the early strike as too preemptive.
On Monday, the New York State Department of Financial Services accused it of laundering $250 billion of Iranian oil money. The bank admits violations of no more than $14 million.
Responding to questions at a news conference, King contrasted the Standard Chartered case with the way agencies dealt with their LIBOR investigation of Barclays’.
“In the LIBOR case, all the regulators involved produced coordinated publication of reports, which came out after the investigation was completed and they all had a chance to make judgments,” he says.
He adds, “That’s very different from what’s happened in the Standard Chartered case where one regulator, but not the others, has gone public while the investigation is still going on.”
King doesn’t believe U.S. authorities are singling out British banks for attention. “Clearly if there has been wrongdoing, then action should certainly be taken.”
Several senior British MPs don’t agree, however. They accused U.S. regulators of pursuing an anti-City of London agenda in its assault on the bank, reports Financial Times, and suggest the move is part of a campaign to weaken the rival financial centre.
John Mann, a member of the Treasury select committee, told FT he detected an “increasing anti-British bias by U.S. regulators and politicians.”
Standard Chartered said yesterday it was continuing to co-operate with the Department of Financial Services and four other U.S. authorities: the Department of Justice, the Office of Foreign Assets Control, the Federal Reserve Group of New York and the District Attorney of New York.
The bank says it voluntarily approached the agencies in January 2010 “and informed them we had initiated a review of historical U.S. dollar transactions, as well as their compliance with U.S. sanctions.”
Standard Chartered shares were up 7.3% to 1,318 pence in midday trading in London, rebounding from a 16.7% after accusations went public.
And King is not the only official who’s irked; the Treasury Department and Federal Reserve were also blindsided and by New York banking regulators’ early move, reports the Vancouver Sun.
By going it alone, sources say these regulators launched an explosive attack on Standard Chartered, and have complicated settlement talks between the Treasury and London-based Standard Chartered.