STAN CHART II

I once got a call from an old friend who was a director at the Bank of England.  I was visiting London and he tracked me down.  "Come around after five, would you. whenever you're free." In those days that meant, "Be here at five, not five Oh one."

Spectacular set-up.  Two malts, (he knew I could afford and drank Malts in those days), bottle of Puss Fuss, and a Bolly on ice (in case I had something going on for dinner that evening...I did, but it didn't stop me) to wash down the salmon, cheeses, and pettit fours.  How nice I thought until one of his assistants came in with a pad and sharpened pencils.  Uh oh, thought I.

I had recently switched institutions and we had a half hour of pleasantries about my new shop.  He got up, poured me another "wee dram" as he called it and said, "Your old employer: tell me Charlie  who the hell is running that bloody place?"  For the second time that evening, uh oh, thought I.

I had been in the same room when the chairman of my bank and Paul Volker had a go at eaxh other, but this was one way traffic,   It went on for the better part of 10 minutes and he had it chapter and verse.  Smiling to myself I thought that I could probably sell tickets to the meeting that was to come.    I had never seen a regulator so mad in all my life.    I felt cooperation was the best course at the time.

The last few days would have probably rivaled that experience.  Benjamin Lawsky is the cief New York State banking Regulator.  His political Rbbi is none other than Sen. Charles Schumer who, as I have stated, upon leaving the House for the Senate took a stupid pill except when in comes to the finance industry from whom he has gladly taken millions in campaign contributions.  Mr. Lawsky also comes out of the Attorney General's off of the state last headed by Mario Cuomo and Eliot Spitzer who was last seen wondering whether he was looking at a Mann Act prosecution for participating in prostitution across state lines...a grab bag of political slugs never before seen outside of Chicago.  Mr. Lawsky exists in a cupola of arrogance and self aggrandizement occupied by only the truly stupid.  He has been trained well.

From what I can determine, he was brought into the investigation of Stan Chart as a courtesy to his position: the action on his part, completely unknown to, or supported by Federal regulators was done purely to promote his image and his political future.  As such, he may be among the most despised not only within the relatively non-political Federal Reserve but withing the very political, same-party Treasury.  A London moment to be sure.

The truth will out sayeth the Bard and it will in this case.  Nevertheless, I will find it quite remarkable if someone doesn't grab this jerk by the scruff of the neck and point out to him that the fact that whilst  Stan Chart is a British financial institution he shouldn't think he can deal with it with impunity.  New York is no longer the world's financial capitol--due in no little part to regulators and regulation.  London has regulators and they answer to politicians who are undoubtably close to Stan Chart, much like his Rabbi is to American institutions.  I would hope that someone might suggest to him that he back off and let the Adults deal with this.  Are you listening, Chuck?

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I made a number of calls to people still in the game in one manner or another regarding the subject of yesterday's post.  The answers I received ranged from, "One would think so" to "I don't want to talk about it, Charlie."  If and what damage was done we will never know