BoE governor questions NY regulator move in StanChart case
Standard Chartered shares have fallen heavily on news it hid Iran transactions from US regulators
By CFOWorld staff | CFO UK | Published 15:57, 08 August 12
The Bank of England governor on Wednesday questioned a New York regulator’s decision for going “public” on Standard Chartered allegations of hiding Iran transations when the investigation was ongoing.
The British investment bank won support from Mervyn King on Wednesday in its fight against the New York banking regulator's allegations that it had hidden $250 billion (£159.7 billion) of transactions with Iran.
The London-based bank lost more than a quarter of its market value in 24 hours after the New York State Department of Financial Services threatened late on Monday to strip it of its state banking licence, dubbing it a "rogue institution" for breaking US sanctions against Iran.
King drew unfavourable comparisons on Wednesday between this case and other US action against British banks, such as the Libor rigging investigation into Barclays where transatlantic regulators coordinated efforts.
He said in Standard Chartered's case, "one regulator but not the others has gone public while the investigation is still going on".
The bank's top executives were working on its defence strategy on Wednesday, having already contested the regulator's figures, saying only a tiny proportion of the Iran-related transactions - less than $14 million - were questionable under U.S. sanctions rules.
Sources familiar with the matter told Reuters that the New York regulator Benjamin Lawsky had angered officials at the US Treasury Department and Federal Reserve by going it alone.
"I think all the UK authorities would ask is that the various regulatory bodies that are investigating the particular case try to work together and refrain from making too many public statements until the investigation is completed," said King.
Standard Chartered shares were up 7.4 percent at 1,319.5 pence at 1100 GMT on Wednesday, boosted by the apparent disunity among US regulators, though they were still about 17 percent down since Lawsky made the allegations.
photo credit: Reuters
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