Should the public direct moral criticism toward banks such as Standard Chartered or HSBC?
Banking
Asked by Question Bot11/Aug/20121 answer
1 Answer
F
Faisal Khan
Answered 11/Aug/2012
The answer is indeed both simple and complex.
Its simple from the viewpoint that if you are indeed doing money laundering or channeling money to known terrorists knowingly then their are punitive damages and/or prison time that can be accorded to the bank and its officials.
On the flip side, the United States Government has a policy to punish those companies, countries, individuals, etc. who befriend what the US calls enemies. That is one facet of the argument. The other facets are like flight of capital abroad for purposes of tax shelter (ref the IRS vs Swiss Banks). Another facet of this is the US Government chooses to ignore such associations, until such a time they (the US Government) feels, the case file can be used. In the banking circles they almost have a crude reference to this: Wall Street's Hoover Files (in reference to J. Edgar Hoover).
There is no denying that clearly, HSBC and Standard Chartered Bank have violated the laws laid down in the rule book. But it is also not that simple. Routing US transactions via US Clearing Houses for US Dollar based transactions menas, the transactions would be routed via New York, this is the way the system is setup for many banks. The same routing is also in SWIFT transactions. This is the one of the many Achilles Heel of the system, and one that the US Regulator (specifically the NY DFI Regulator) have taken to punish SCB (which he rightly can).
HP, Intel, Motorola, Apple, etc. all have their goods going to Iran, via agents, sub-agents, etc. How come these companies don't get punished? (Hint on the Answer: Exports proceed). US Banks operate Billions of US Dollar transactions each year in Middle East, a lot of which gets inter-changed (knowingly) via Middle East based licensed banks, and this money goes to Iran - how come such transactions are not stopped?
Its a common site to see Caterpillar Heavy Machinery in Iran - how come this does not get noticed.
Its all about teaching lessons. Punitive whip-lashing of the wrists and buttocks. All because the US can do this.
It all boil downs to one Government's liking or hatred for a particular country, organization, company or individual.
Its simple from the viewpoint that if you are indeed doing money laundering or channeling money to known terrorists knowingly then their are punitive damages and/or prison time that can be accorded to the bank and its officials.
On the flip side, the United States Government has a policy to punish those companies, countries, individuals, etc. who befriend what the US calls enemies. That is one facet of the argument. The other facets are like flight of capital abroad for purposes of tax shelter (ref the IRS vs Swiss Banks). Another facet of this is the US Government chooses to ignore such associations, until such a time they (the US Government) feels, the case file can be used. In the banking circles they almost have a crude reference to this: Wall Street's Hoover Files (in reference to J. Edgar Hoover).
There is no denying that clearly, HSBC and Standard Chartered Bank have violated the laws laid down in the rule book. But it is also not that simple. Routing US transactions via US Clearing Houses for US Dollar based transactions menas, the transactions would be routed via New York, this is the way the system is setup for many banks. The same routing is also in SWIFT transactions. This is the one of the many Achilles Heel of the system, and one that the US Regulator (specifically the NY DFI Regulator) have taken to punish SCB (which he rightly can).
HP, Intel, Motorola, Apple, etc. all have their goods going to Iran, via agents, sub-agents, etc. How come these companies don't get punished? (Hint on the Answer: Exports proceed). US Banks operate Billions of US Dollar transactions each year in Middle East, a lot of which gets inter-changed (knowingly) via Middle East based licensed banks, and this money goes to Iran - how come such transactions are not stopped?
Its a common site to see Caterpillar Heavy Machinery in Iran - how come this does not get noticed.
Its all about teaching lessons. Punitive whip-lashing of the wrists and buttocks. All because the US can do this.
It all boil downs to one Government's liking or hatred for a particular country, organization, company or individual.