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Martin wades into abortion debateAs the Dáil committee hearings continue on the abortion bill, Archbishop of Dublin Diarmuid Martin has waded into the debate saying it is important that Christian believers "be, and seen to be, on the side of life, especially when life is most vulnerable".
Payment cuts see families pay rent shortfallLimits on rent supplement payments set by the Government are forcing thousands of families to make undeclared top-up payments to landlords to secure places to live.
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Anger as North Korea launches another missileNorth Korea fired a short-range missile from its east coast, a day after launching three more of these missiles, a South Korean news agency said.
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Warnings over future of eurozoneThe eurozone is heading towards a break up unless there are moves towards much closer political and fiscal union, according to chief economist with State Street Global Advisers, Chris Probyn.
Bruton defends corporate tax rateIreland will be able to maintain its current corporation tax code in the face of international pressure to prevent multinational corporations avoid paying their fare share of tax, Minister for Jobs, Enterprise and Innovation, Richard Bruton said yesterday.
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Mayo’s statement of intentGalway 0-11 Mayo 4-16 Five minutes to go in Salthill yesterday and James Horan was still cajoling his men to sew it into Galway.
Wilkinson inspires Toulon to gloryASM Clermont Auvergne 15 Toulon 16 Not for the first time this season, a matchday performance and the result have made a mockery of the statistics.
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Banks’ power vacuum finally being challenged
By Jonathan Weil
To see how the federal government has pursued money-laundering cases against big banks over their dealings with Iran and other countries under US trade sanctions, consider what happened when Barclays and the justice department were required to file reports describing the UK bank’s co-operation under a settlement in 2010.
The deadline came and went. Barclays and the justice department failed to comply, infuriating US district judge Emmet Sullivan, who had ordered that the reports be filed. “I am amazed that with all the legal talent before the court that no one opened the order to read it,” he said.A justice department attorney, Kevin Gerrity, told the judge he couldn’t explain the lapse. Before approving Barclays’s deferred prosecution agreement, Sullivan called it a “sweetheart deal”. Barclays paid $298m (€242), its core business was unscathed, and no executives were charged.
Standard Chartered can only dream of having such a light touch for an adversary. This week, the New York state department of financial services threatened to revoke Standard Chartered’s state banking licence — far more serious than a mere fine — after accusing the UK bank of using its New York office to illegally launder $250bn for Iranian financial institutions, including Iran’s central bank.
Although it’s hard to imagine the department’s superintendent, Benjamin Lawsky, carrying out his threat, it’s refreshing to see anyone in a position of authority even go through the motions of fully enforcing the law against a big bank.
Eight years ago, Standard Chartered signed an agreement with the New York state banking department and the Federal Reserve Bank of New York, promising to correct deficiencies in its anti-money-laundering policies and procedures. Lawsky took action after determining that Standard Chartered violated the agreement. The Fed chose not to, for reasons it has yet to explain.
Lawsky has scheduled a hearing for Aug 15, when Standard Chartered will be asked to show why its state banking licence shouldn’t be revoked.
“Led by its most senior management, SCB designed and implemented an elaborate scheme by which to use its New York branch as a front for prohibited dealings with Iran,” Lawsky’s order said. “By definition, any banking institution that engages in such conduct is unsafe and unsound.”
The order accused Standard Chartered of numerous violations of state banking laws, including falsifying its books and records.
Standard Chartered has denied Lawsky’s allegations — and it has been fairly aggressive about it, which might not be so wise. Although the department’s decisions can be appealed, the standard for review that courts usually apply under New York state law is whether a regulator’s decision was “arbitrary and capricious”. You would think Standard Chartered would be trying to show Lawsky respect, rather than arguing with him.
The company this week accused Lawsky of failing to present “a full and accurate picture of the facts”. It claimed that “99.9% of the transactions relating to Iran complied with” US regulations. The bank said it has been in talks with the Fed, the justice department, the treasury department, and the Manhattan district attorney’s office — and suggested Lawsky was out of bounds for acting without their co-ordination.
As superintendent, Lawsky serves at the pleasure of New York governor Andrew Cuomo, a Democrat. So here you have Cuomo’s administration jumping ahead of a Democratic president’s administration and the Fed to take on a big bank. That willingness to show an independent streak might be a plus for Cuomo, should he run for president in 2016.
If what Lawsky alleges is true, Standard Chartered deserves to lose its licence. If that meant the bank couldn’t process dollar payments for clients that have operations in New York, so be it. Just because a bank has $624bn of assets shouldn’t make it immune from the law.
Federal regulators and prosecutors are the ones who created the power vacuum by going soft on banks for so long. Lawsky is filling it in, and evoking memories of how Eliot Spitzer challenged the securities industry a decade ago when he was New York attorney general. We’re about to find out if Lawsky has the chops or the stomach for the role.