Posts Tagged ‘Standard Chartered Bank’

Time to clean up the banking sector in London, New York style

17/08/2012, 07:00:48 AM

by Atul Hatwal

Ben Lawsky. Remember that name. This week he changed how banks and financial institutions across the world will be regulated.

While the UK relies on esteemed commissions like Vickers or waits for its parliamentarians to stroll through detail of the the Libor scandal, the state of New York has re-defined how to regulate.

Lawsky runs the department for financial services.  If a financial institution wants to do business in New York, they need a licence from Lawsky.

This week the superintendent – for that is Lawsky’s title – humbled Britain’s mighty Standard Chartered Bank (SCB).

Eleven days ago he issued an order against SCB on its failure to stop money laundering for Iranian organisations. The order was scathing, stating Standard Chartered was “rogue” and was engaged in “dealings that indisputably helped sustain a global threat to peace and stability.”

The bank pushed back strongly, other regulators briefed financial journalists that Lawsky was over playing his hand and even the governor of the Bank of England Mervyn King weighed in, rebuking Lawsky for his precipitate action.

The clue as to what would happen next was in Mervyn King’s intervention. Given his track record on effective banking sector regulation, there was only going to be one outcome.

Earlier this week Standard Chartered settled to the tune of $340m.

It is an enormous win for Lawsky and re-writes the rules for financial regulation in a way that will have major political ramifications in the UK.


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Standard Chartered: these are the real ills of modern banking

08/08/2012, 12:31:21 PM

by Rob Marchant

Banks, eh? On the British left, we’re often so busy disliking them in general that we don’t always take the time to differentiate between their misdemeanours.

While we’ve been exercising ourselves greatly about irresponsible bankers who have largely been operating within the rules – and where arguably we ought to be looking first to governments, for not having done their jobs in regulating them properly – we miss something else.

And so, much less attention has gone, until recently, on a much more serious problem: those who actively flout the rules. In particular, the illegal transfer and laundering of money.

On Monday the stock of Standard Chartered Bank (SCB), one of Britain’s oldest banking institutions, dive-bombed as it was accused of sanctions-busting with Iran. Accused, because the bank currently denies this. We shall see. If true, it is a sad and ironic tale, which I can perhaps help explain, because I used to work there.

SCB has been, in fact, a real British success story, formed from the merger of two old colonial banks in 1969, although its success was largely due to seeking its fortune in Asia. Although not so well-known to the British public, in Hong Kong and Singapore it is as much a high-street bank as NatWest is in the UK. And although it still keeps its legal HQ in London for regulatory – and perhaps historic – reasons, its real revenue and headcount is in these Asian hubs, as well as, more recently, China and India.

It’s an interesting place to work, because it has a culture which is international, and yet unlike many multi-nationals, not particularly American (its New York branch is actually quite small). Indeed, although it has modernised, and “Asianised”, its corporate culture since the stuffy 1960s, it might also be viewed as a microcosm of what multinationals might look like, had the sun not set on the British Empire during the 20th century: a British-Asian fusion, a latter-day East India Company.

For all these reasons, it surprises me not a jot that one of its British execs might utter the words “You f—ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?”


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