Olympics, Olympics

The London Olympics have had me hurling cries of encouragement at my TV and left me, and many others I am sure, with a sense of wellbeing. What great efforts by athletes and organisers to bring us these outstanding Games.

We have seen examples of equality, egalitarianism and fraternity in sportsmanship, and cheered even on the occasions when this hasn't benefited us in the medal stakes. 

However, I find it somewhat worrying that not even a soupcon of the above is evident regarding accusations and pronouncements from across the Pond, to the extent that recent events relating to Standard Chartered beg the question: "Is there a US hit squad on the lose with UK banks in its sights?" 

The supposition is reasonable, given that the alleged money laundering revelation at StanChart followed a grovelling apology from HSBC which has effectively put up its hands to failings regarding the alleged laundering of Mexican drugs money through the US.

Then there's Barclays in the hot seat over LIBOR manipulation, together with a number of other UK banks, making it seem as if the US regulatory finger is constantly being pointed at UK financial institutions.

I was always told as a child that s/he who points the finger and protests loudly is usually as guilty as whoever is being charged and with regard to Barclays and LIBOR, any conspiracy theorist will tell you that accusations in the US have arisen as a result of the bank swooping in and buying Lehman's juiciest assets (including its Wall Street office block) for a song, back in 2008. 

Worse still, Barclays then won the court case brought by Lehman creditors over the price paid, making it a sure target for a US banking hit squad. 

In addition, it is worth noting that StanChart has been called to account by the New York State financial regulator, not the US Securities and Exchange Commission (SEC).

Normally, the SEC makes its major announcements at the same time as the bank it is targeting has agreed to reparations but it would seem that the New York State Department of Financial Services (DFS) has gone for a more headline-grabbing approach - to the extent of accusing Standard Chartered of having "schemed" with the Government of Iran over ten years.

With such a damaging pronouncement (especially where the bank's share price is concerned) one wonders whether Standard Chartered would have legal recourse for defamation if US authorities are proven to have been overly aggressive.  

StanChart has strongly refuted the allegations and looks set for a fight, saying in its press release "the group strongly rejects the position or the portrayal of facts as set out in the order issued by the DFS". 

Having reviewed its compliance with the U-turn framework established by US authorities to enable ongoing US dollar trade with Iran by other countries, the bank says that less than 00.01 per cent of the transactions relating to Iran actually failed to comply with regulations.

A reasonable margin for error you may think, and Standard Chartered could expect a reasonable response, especially given that its review did not throw up a single payment on behalf of any party designated by the US Government as a terrorist entity or organisation. 

However, reason may have flown out of the window as there is a sniff of a witch hunt in the US against UK banks and at this point, I would like to recommend that US authorities focus more on their home-grown problems.

For example, by addressing a report by CNN from a year or so back, stating that that 90 per cent of paper money circulating in US cities contains traces of cocaine!

I could also remind our US brethren, who stem from a Puritan background, that they were the home of the Salem Witch trials and that they may wish to refrain from constantly looking and shouting out "Oh! Oh! There goes another pointy black hat".

As mentioned before in Lead Taker, compliance and regulation go hand-in-hand with responsibility, but what has happened to Standard Chartered seems to me to be highly irresponsible and smacks of trial by media.

The US justice system is similar to ours in that the accused is innocent until proven guilty but who is going to listen to the bank's side of things when, in today's climate, banks are frequently declared guilty by pronouncement?

I am leaving it to the reader to decide whether or not I am just a madman shouting at the traffic but don't make an instant judgment on that.

Give it a couple of months, as we need to see whether US regulators are about to sniff out more witches whose covens are located in the UK!