Let’s line it up next to its fellow British banks: HSBC – laundering money for drug-dealers; Barclays – fixing Libor; RBS – owned by the state; Lloyds – owned by the state. What a glorious financial services sector we have!
The complaint against Standard Chartered makes for unedifying reading, with its allegations of running money for Iran:
‘For almost ten years, SCB schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and reaping SCB hundreds of millions of dollars in fees.
‘SCB’s actions left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity.’
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That’s even before they accuse a British executive of almost a more heinous crime – using the f-word: ‘You f—ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.’
Download the results of the investigation here
So the final large British bank is dealt a grievous blow. (Update: Standard Chartered does of course deny the allegations.) StanChart probably won’t lose its New York banking licence – the state could put a large fine to good use – but its reputation has been trashed, and this after it survived the financial crisis without a bailout.
Let’s line it up next to its fellow British banks: HSBC – laundering money for drug-dealers; Barclays – fixing Libor; RBS – owned by the state; Lloyds – owned by the state. What a glorious financial services sector we have!
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Governments have let our banks run riot ever since Big Bang, and they have grown into these lawless, irresponsible behemoths. Is their responsibility to their customers, or to the state, or to society? No, it’s to themselves and their foolish shareholders who saw increasing profits but not the increasing risk or increasing illegality.
And this is the sector we supposedly excel the world at. Fine, our insurance companies and accountancies and even some private banks (those independent ones) have not been as exposed or as corrupt – but the colossi have proved themselves crooked and dangerous.
Warren Buffett, naturally, was on the money: ‘You only find out who is swimming naked when the tide goes out.’ With the financial crisis, the tide went out and we saw that all of our banks had been engaged in (sometimes alleged) criminal or at the very least immoral behaviour. In the good times, when governments are reaping healthy tax income, it’s easy for them to ignore what’s going on, or at least not devote sufficient resources to regulators and prosecutors.
In the bad times, however, they need money and the public want vengeance, which happy combination means that banks’ misdeeds (deservedly) come to light. This is not to say that the punishment of the banks isn’t appropriate – it just serves interests greater than justice.
When the tide went out in 2008, it wasn’t like the normal lunar pull, part of nature and balance: no, it was the way an earthquake pulls back the tide before a tsunami rears up and destroys the swimmers.
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