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 firms.
Bloomberg News reports that since HSBC agreed to pay $1.9bn 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 $10bn fine from 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 Paribas 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'.
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