more lawless bankers. tis the season

http://www.reuters.com/article/2012/08/07/standardchartered-iran-india-idUSL4E8J749Y20120807

The New York banking regulator's accusation that Standard Chartered Plc hid $250 billion in transactions tied to Iran may bring fresh scrutiny on the outsourcing of sensitive functions by global financial institutions, especially to India.

Standard Chartered lost $16 billion in market value on Tuesday as its shares plunged after the New York State Department of Financial Services (DFS) threatened to cancel the British bank's state banking licence.

As part of its report, the regulator said the bank's failures included "outsourcing of the entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices."

The bank CEO used the 'f' word when asked about the US regulator's accusation... "who are they to tell us we can't trade with Iran?"

So banks can do whatever they want, regardless of the government?

Surely less regulation would solve this problem, but maybe the problem is not with regulations.

Maybe the problem is that this bank broke the law. 

They lost $16 billion in market value? Wow.

Someone's pocket will be emptied, but I suspect it will not be anyone involved with the crime.

@blowdart:

Who is to tell the UK to tell the US to tell a company which isn't American what to do?

That's right. You've been told. USA!! USA!!

3 minutes ago, blowdart wrote

*snip*

It's a British bank. So who is the US to tell a company which isn't American what to do?

Firstly: If you have a US banking licence, then the US absolutely can tell you what you can and cannot do (under penalty of having your US banking licence revoked). US banks can't do business with other banks that don't have one, and so on recursively, so if they lose their US licence then not only can JP Morgan Chase (a US bank) not do business with them, but neither can HSBC (a british bank), because if they do, then HSBC also loses their US banking licence. In practice, doing business with the closure of all US banks and any other bank that wants to do business with those banks is a huge percentage of all banks.

And secondly, there's an EU-wide trade ban on doing business with Iran's financial institutions (like Central Bank of Iran and Bank Saderat), so they were breaking EU (and hence UK) law as well.

To be honest, stuff like this and the HSBC debacle over money laundering in Mexico and the Barclays crisis caused by fixing the LIBOR lending rate, as well as stuff like the Payment Protection Insurance fiasco is increasingly leading me to feel like the entire British Banking system is just completely corrupt from the ground up.

You might be able to blame the global financial crisis on bad luck and poor judgement, but this collection of disasters is entirely the fault of corruption in the British banking industry. Frankly it makes me feel ashamed to be British to know that we've had this all going on to the tune of trillions of dollars overall with our government happily sitting on the sidelines twiddling its thumbs and letting it happen.

It shouldn't be up to the US Congress to stomp on the outright illegality and corruption that is going on in London. The UK government should start putting these folk in jail, and pronto. We've had zero arrests or convictions of bankers relating to the financial crash or corruption. It's about time we started.

Just been listening to opinions about this on the radio -- the New York banking regulator is a new regulation body looking to make a big splash.  They chose a non-American bank to start with and an 'easy target' at that.  Standard Chartered state that only a few million dollars went through this as opposed to the 160 billion that the regulator is claiming. There's a lot of politics involved here.

There have also been a number of American banks in scandals recently (including one fined $400 million for Mexican drug cartel laundering same as HSBC was fined for) but strangely the American regulators don't make as much of a noise about those.

Generally speaking -- storm in a teacup.  If I had gone with my initial thought to buy Standard Chartered shares this mid-morning after the slump, I'd be almost 10% in profit already. I still might buy some tomorrow.

Herbie

So Bankers have the option of disallowing government directives, such as "don't trade with Iran, we're trying to prevent them from gaining nuclear weaponry"?

The banking block on Iran includes having Iran taken off the banking trading network (which is located somewhere in Belgium).

This is not only the US government's decision. The British have sanctions against Iran banks too: http://www.bbc.co.uk/news/uk-politics-15823622

Mr Osborne said: "We have ceased all contact between the UK's financial system and the Iranian financial system.

"We're doing this because of international evidence that Iran's banks are involved in the development of Iran's weaponised military nuclear weapon programme.

Fancy pants, the lot of them. Above the law.

Why are we so complacent with such selfish action? Are profits our only authority?

@evildictaitor:  +1, don't leave out the USA banks -- they're all in it together: Plutocracy, Oligarchy.

To be honest, stuff like this and the HSBC debacle over money laundering in Mexico and the Barclays crisis caused by fixing the LIBOR lending rate, as well as stuff like the Payment Protection Insurance fiasco is increasingly leading me to feel like the entire British Banking system is just completely corrupt from the ground up.

Banks are so out of control they don't even trust each other anymore. And we keep looking away...

<rant>

Weeeeeeeeee more regulations!

Let's regulate the entire banking sector! It's a market failure!!1!!1one!, Government has to step in, since we've had zero government failures (ok, ok, two world wars, several mass murders, a cold war to see who has the biggest *, several great crisis, the EU, a couple of other dictorial regimes, but they know what's best, really, they do, really, trust me)!

Because you know, politicians know waaaaaaaaaaaaaaaaaaay better then bankers how stuff in the banking industry works. Making it near impossible for bankers to do normal business, so they operate in the grey areas.

I still stand by my original standpoint; it's the government and only the government we have to blame for the shithole we are in now. Lending money on behalf of unborn citizens to spend on futile endevours to change the weather and all kinds of other crap.

And why not trade with Iran? Because they are dicks? Let me bring you up to speed; the world is full of dicks. Don't let those dicks ruin the world. There is only one system and one system only that demonstrated that it is capable of bringing peace and prosperity to everyone, and it's not government, it's the free market.

Trade with Iran, let them evolve out of the shitty situation they are in. Keeping em poor is only adding to their hatred.

</rant>

@Maddus Mattus: Law is law, not up for debate. Bankers get no pass.

Iran is not poor. The attempt is to take away Iran's ability to wage war, especially nuclear. They hate their own corrupt government more than the west already. Be patient and use the economic means available to paint their leaders as wholly inept.

Why not trade with Iran? Because it's illegal. Not optional.

Bankers left scat in their beds. Time for them to lie in it and get to know themselves honestly, and I'd love for you to rub their noses in it, Maddie.

don't tell me to drive on the right side, I am British!!!!

@JohnAskew: It is sad that these guys do preform maybe the biggest role in our economy.

10 hours ago, JohnAskew wrote

@Maddus Mattus: Law is law, not up for debate. Bankers get no pass.

Iran is not poor. The attempt is to take away Iran's ability to wage war, especially nuclear. They hate their own corrupt government more than the west already. Be patient and use the economic means available to paint their leaders as wholly inept.

Why not trade with Iran? Because it's illegal. Not optional.

Bankers left scat in their beds. Time for them to lie in it and get to know themselves honestly, and I'd love for you to rub their noses in it, Maddie.

Exactly my point. These laws are stupid. They are put in place with good intentions, but have disasterous effects in the real world.

I'm not going to trade with you, because well maybe, just maybe, you will wage war with me.

If you trade with them, they become dependent on you. If they are dependent on you, they cannot wage war with you.

Now Iran is not dependent on anybody, so they can afford to be dicks.

It's these stupid laws that force bankers to more and more grey areas of trade to make a decent living. It's these stupid laws that they use as an excuse for ripping off consumers. If the program exists, why not use it? None of these bankers feel the consequence of their actions, that's why they make these poor decisions, they don't care one way or another. More regulations is not going to make them act more responsibly, like I said before, the less responsibility you have the more irresponsible you act.

If you really care about these things and want to make our system healthy again, the only way is back to a truly free market and not let government run it all. We've tried overregulating here in Europe, it's not working, the failures are bigger, not smaller.

But you are free to repeat our mistakes.

@Maddus Mattus:

hmmmm....... too much regulation is not good, but,.............. what you are implying, is to remove FDIC insurance government involvement.......... isn't that what you are implying?

And USA wants to stop trading with its enemy and enforce its foreign policy.......... hmmm....... you think that's wrong?????? hmmmm........ okayyyyyyyy............

===

I dislike a lot of wasteful regulations. But, there are tons of important regulations out there. And enforcing foreign policy is pretty much a federal national matter that I would not take it lightly.

I agree with you sometimes, but, you are taking it to the extreme.

@magicalclick: I'm implying that regulations should be judged on their outcome, not on their intention.

If a regulation has a negative outcome, it's costing us more then it's benefiting us, it should be canned.

There are plenty of very good and very useful regulations, that have provided safety nets and safe guards, these are the gems we need to keep. I'm not against all forms of government, regulation and taxes. I just think the system is too big, too heavy and is now collapsing in on itself.

And USA wants to stop trading with its enemy and enforce its foreign policy..........

Let's judge this regulation on it's outcome.

Do you believe that;

a) it has brought Iran and the USA closer together

or

b) it has driven them further apart

The beauty of free trade is that it doesn't matter if you hate each other or not, you have something they want and they have something you want. Both are willing to put aside their differences for their own interests.

Make em rich, make em educated, make em think for themselves and make a buck in the process.

That's exactly how India and China are doing it and they are not making enemies, but friends.

@Maddus Mattus: The tactic is to remove the enemy's ability to wage war - sanctions (and Iran's removal from the international banking clearinghouse) work extremely well, except when bankers illegally facilitate a workaround like they did for the sale of half a trillion dollars worth of oil.

Iran is in the grips of fundamentalist conservative religious old men who are not in touch with the very young population there. The government is rife with corruption. It is my opinion that Iran will enjoy Syria's fate soon enough. Iranians deserve better than what they have today, imho.