A threat by a New York regulator to strip Standard Chartered Plc of its state banking license and its description of the British bank as a "rogue institution" that hid $250 billion in Iranian transactions, has touched a nerve with some in London.
Several of the bank's top shareholders and a leading opposition lawmaker have questioned whether U.S. authorities are seeking to undermine London as a global financial centre.
They note Standard Chartered is the third British bank to be ensnared in U.S. law enforcement probes in recent weeks. The New York state's Department of Financial Services said the bank hid the transactions that generated hundreds of millions of dollars in fees over nearly a decade.
The accusation comes after Barclays Plc agreed in June to pay $453 million to settle U.S. and British probes that it rigged Libor, a global lending benchmark.
A month later, a U.S. Senate panel issued a scathing report that criticized HSBC Holding's efforts to police suspect transactions. It said HSBC did regular business in countries tied to drug cartels, terrorist funding and tax cheats.
"I think it's a concerted effort that's been organized at the top of the U.S. government. I think this is Washington trying to win a commercial battle to have trading from London shifted to New York," said John Mann, a member of parliament's finance committee who also called for a parliamentary inquiry.
Mann, from the centre-left Labor party, has become a public scourge of London bankers' greed and immorality during the financial crisis. But he told Reuters he saw "anti-British bias" behind "disproportionate publicity that's given to British banking problems, as opposed to American banking problems."
"This is a political onslaught," he said.
However, there are signs that U.S. regulators themselves are not in lockstep.
Sources told Reuters that U.S. federal regulators feel angry and blindsided by the way the New York banking regulator took action against Standard Chartered, including the publication of embarrassing communications from senior executives of the bank.
The U.S. Treasury Department declined to comment on the views from London. A spokesman for the U.S. embassy in London also declined to comment on Mann's remarks.
But a number of British fund managers holding shares in Standard Chartered also expressed consternation about the New York broadside and questioned what it might mean.
A British executive at an institution, which ranks among the top 25 shareholders in Standard Chartered, saw a politically motivated move by U.S. officials irked by the major role London plays in the global financial industry.
"Are we starting to see an anti-London bias in U.S. regulatory activities?" the executive asked. "Oh yes. Is there any subtle form of banking sector protectionism going on? Yes."
Another British investment official at a top 20 shareholder in the bank suggested U.S. politics might be an element in the threat by the New York regulator to pull Standard Chartered's state banking license.
"I wonder if this has more to do with the point we are at in the U.S. election cycle or if this is just an accident of the U.S. legislative system in terms of timing," the investor said.
Skepticism in Britain of U.S. motives was not universal, however. An executive at a top 10 investor in Standard Chartered said he was reviewing his shareholding and that the depth of the issues needed to be acknowledged by the City of London.
"London is looking like a pretty disreputable place at the moment," he said.
"Rather than fall into the British them-versus-us-mindset, let's really bang our chests and figure out just how dirty London really is as a place to do business."
© 2022 Thomson/Reuters. All rights reserved.