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Europe Bankers Cringe at Escalating U.S. Fines Amid BNP Skirmish 2014-06-12 04:31:46.140 GMT
By Elisa Martinuzzi and Ambereen Choudhury June 12 (Bloomberg) -- HSBC Chairman Douglas Flint had some advice for bank executives meeting in London last week: Read up on how the U.S. uses financial warfare against its enemies in a foreign-policy shift that’s entangling lenders. * Since HSBC agreed to pay $1.9b to settle money-laundering probes in the U.S. 18 months ago, the largest such accord at the time, the Department of Justice has magnified its demands; it wants a guilty plea and a $10b fine from France’s BNP Paribas for doing business in sanctioned nations such as Sudan and Iran, people with knowledge of the matter say * The amount sought from BNP is adding to U.S. operational risks and the unpredictability of fines, European banking executives interviewed by Bloomberg News said; Sharon Bowles, a European Union lawmaker who chairs the bloc’s economic and monetary affairs committee, said she’s worried the collateral damage will be the banking system’s stability * “I’m concerned about the system risk to banks,” Bowles said in an interview; “There is now a different regime in the U.S., and they pay much more punitive fines than is the norm in Europe. We have spent a lot of taxpayers’ money to stabilize the banking system, which could now be destabilized” * Link to full story
For Related News and Information: BNP Drops as U.S. Said to Seek $10 Billion in Settlement NSN N6EC0D6JTSF5 <GO> France’s Noyer Says BNP Case May Prompt Shift Away From Dollar NSN N70SJV6JIJUT <GO>
--With assistance from Hugh Son, Dakin Campbell and Yalman Onaran in New York, Fabio Benedetti-Valentini in Paris, Tom Schoenberg in Washington and David Scheer in Seattle.
To contact the reporters on this story: Elisa Martinuzzi in Milan at +39-02-8064-4218 or emartinuzzi@bloomberg.net; Ambereen Choudhury in London at +44-20-3525-3862 or achoudhury@bloomberg.net To contact the editors responsible for this story: Edward Evans at +44-20-3525-3190 or eevans3@bloomberg.net Keith Campbell, Robert Friedman