Articles/Columns
Another Bank Fine
Just over a month ago, Barclays was fined roughly $450 million for manipulating LIBOR – a key global interest rate. A few days ago, another British bank, Standard Chartered, agreed to pay a $340 million fine to New York’s Department of Financial Services (DFS) due to a reported $250 billion worth of transactions linked to Iran. As reported by Bloomberg, “between 2004 and 2007, Standard Chartered was subject to formal action over other regulatory compliance failures related to the Bank Secrecy Act (also known as the “anti-money laundering law”) – anti-money laundering policies and procedures and regulations of the U.S. Office of Foreign Assets Control. Essentially, Standard Chartered was accused by New York’s lead regulator of keeping false records and concealing the names and identities of their Iranian clients within these illegal transactions that cleared through Standard Chartered’s New York business unit between 2001 and 2007. The DFS in New York unilaterally took action and charged Standard Chartered last week of breaking U.S. anti-money laundering laws. Bloomberg reported that other regulators (U.S. Treasury, Federal Reserve, Justice Department, and Manhattan District Attorney) have been investigating Standard Chartered and are also seeking a settlement deal with the bank for the Iranian transactions, plus other alleged violations. Reuters also pointed out that in the past few years, other banks had settled their violations of illegal transactions: Barclays paid $298 million in 2010, Lloyds Banking Group paid $350 million in 2009, Credit Suisse Group paid $536 million in 2009, and ING Bank paid $619 million just a few months ago. In addition, HSBC is currently under investigation by U.S. law enforcement. If the fines are more than the profits made from illegal transactions or services, then perhaps these troubled financial institutions should expand their risk management mandate to also focus on rogue employee risks. Otherwise, these fines are simply the cost of doing business, and these banks will continue to share their profits with regulators.
Standard Chartered PLC Share Price (past year)
Source: Bloomberg
（2012/8/16 掲載）