Third British Bank Scandal

Britain’s thirteenth largest company, Standard Chartered, becomes the third British bank to be mired in controversy. This follows the LIBOR Scandal at Barclays and the HSBC Mexican gang controversy. Standard Chartered has been accused by American authorities of performing illegal transactions with Iranians. As you probably know, America has placed economic sanctions on Iran, so if an Iranian company wishes to perform a trade based in US dollars, it cannot do so. What Standard Chartered is accused of is hiding the fact that these transactions involved Iranian companies. Allegedly Standard Chartered has performed such actions up to 60,000 times. Standard Chartered completely refutes the accusations.

If it turns out that Standard Chartered has acted illegally then it would be devastating to the bank. It could lose its banking license in the US, considering that the dollar is the worldwide reserve currency, this would affect a significant proportion of transactions outside of the United States. It would also cause irreparable damage to the bank’s image; the bank prides itself in being ethical. Consistent reviews by organisations place the bank as one of the most ethical banks in the world, and Britain’s most ethical bank.

Another important point to note is that this is the third scandal involving a British bank that has been exposed by American, not British, authorities and regulators. There is a growing feeling in the City of London that the Americans are increasingly gunning for UK banks. This is somewhat unfair as the Barclays’ scandal is known to involve more banks, Barclays’ was simply the first to admit its guilt. Nonetheless London’s taking over as the worldwide financial centre from New York has left a lot of American banks less than happy.