Standard Chartered begins fighting back on Iran allegations
By Carrick Mollenkamp and Steve Slater
NEW YORK/LONDON (Reuters) - Standard Chartered won some help from Britain's central bank governor on Wednesday in its fight against the New York banking regulator's allegations that it had hidden $250 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 cancel its state banking license, dubbing it a "rogue institution" for breaking U.S. sanctions against Iran.
Standard Chartered shares bounced 8.3 percent on Wednesday to 13.32 pounds, up from the 3-year low of 10.92 pounds they hit in the last two days, but still down 17 percent since the New York regulator made the allegations.
The bank's top executives were working on its defense 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.
Bank of England Governor Mervyn King drew unfavorable comparisons on Wednesday between this case and other U.S. action against British banks, such as the interest rate-manipulating investigation into Barclays PLC.
In the Barclays case, all regulators in Britain and the United States produced coordinated reports after the investigation was complete, he said, but in Standard Chartered's case, "one regulator but not the others has gone public while the investigation is still going on".
Sources familiar with the matter told Reuters that the New York regulator Benjamin Lawsky had angered officials at the U.S. 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. Continued...