Bank of England chides NY agency accusing UK bank

[August 08, 2012]  LONDON (AP) -- The governor of the Bank of England on Wednesday criticized a New York state agency for accusing Standard Chartered bank of money laundering before other regulators had completed their own investigations.

On Monday, the New York State Department of Financial Services accused the British bank of laundering $250 billion of Iranian oil money. The bank admits violations of no more than $14 million.

Responding to questions at a news conference, Bank of England Governor Mervyn King contrasted the Standard Chartered case with the way in which U.S. and British agencies dealt with their investigation of Barclays' manipulation of the London interbank offered rate (LIBOR), a key interest rate index.

Barclays agreed to pay fines totaling $453 million to settle investigations by the Department of Justice and the Commodity Futures Trading Commission in the United States and the Financial Services Authority in Britain.

"In the LIBOR one, all the regulators involved, whether it be in the United States or in England, produced coordinated publication of reports which came out after the investigation was completed and they had made their judgments," King said.

"That's very different from what's happened in the Standard Chartered case where one regulator, but not the others, has gone public while the investigation is still going on."

King said he did not believe that U.S. authorities were singling out British banks for attention. "Clearly if there has been wrongdoing, then action should certainly be taken."

The New York Statement Department of Financial Services came into being in October last year, replacing the previous regulator, the Banking Department.

Standard Chartered said on Tuesday that it was continuing to cooperate with the Department of Financial Services and four other U.S. authorities: the Department of Justice, the Office of Foreign Assets Control, the Federal Reserve Group of New York and the District Attorney of New York.

The bank said it voluntarily approached the agencies in January 2010 "and informed them that we had initiated a review of historical US dollar transactions and their compliance with US sanctions" primarily between 2001 and 2007.

Standard Chartered shares were up 7.3 percent to 1,318 pence in midday trading in London, rebounding from a 16.7 percent drop on Tuesday.

[Associated Press; By ROBERT BARR]

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