Johnson: US jealous of London’s financial hub

London mayor Boris Johnson has accused US regulators of acting in a “high-handed” way over Standard Chartered, and said criticism of British banks stems from envy of London as a financial centre.

The US “is still the land of the free and the home of the brave and, every now and then, just a tiny bit high-handed in her treatment of other nations”, Johnson wrote in a column for the Spectator magazine, due to be published today.

“I mean, what is all this stuff about Standard Chartered? This British bank has generally enjoyed a high reputation for probity [as these places go] until yesterday, when some New York regulator apparently denounced Standard as a ‘rogue institution’,” Johnson wrote.

Standard Chartered shares have slumped about 15% in London this week after New York regulator Benjamin Lawsky threatened to strip the bank of its license to operate in the state, alleging it processed $250bn (€202bn) of deals with Iranian banks subject to US sanctions.

The London-based lender denies the allegations.

“Well, if people have broken the law of this country, then by all means bang them away,” wrote Johnson, who has consistently defended the interests of the banking industry amid the public and political backlash triggered by the 2008 financial crisis.

“But you can’t help wondering whether all this beating up of British banks and bankers is starting to shade into protectionism.

“And you can’t help thinking it might actually be at least partly motivated by jealousy of London’s financial sector — a simple desire to knock a rival centre,” he wrote.

Lawsky’s order described how the head of Standard Chartered’s US unit warned his superiors in London in 2006 that the bank’s actions could expose it to “catastrophic reputational damage.”

The official received a reply referring to US employees with an obscenity. “Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?” a bank superior in London said, according to the order.

Referring to the comment, Johnson wrote: “I disapprove of the language, of course. But I have to say — and I speak as the proud possessor of an American passport — that there seems to be something fine and sound about the underlying sentiment.”

Bloomberg


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