I will say one thing about the management: they know what they don't know and what they don't like and that is a very good thing indeed. They decided in the early 1990ies that they wanted no part of the new "flash" banking that everyone was into but would stick with what they knew best; correspondent banking in emerging markets, trade banking, "exotic" currency trading and local corporate banking, again in emerging markets. They were/are very good at what they choose to do.
They are also smart enough to know their place. They are very big in Hong Kong but they never take on The Bank directly. They keep excellent relationships with local authorities and avoid the Best New Idea of the day. Little derivative trading, no CDSs, no MBOs. Just blocking and tackling, three yards and a cloud of dust, manage relationships carefully and just make money.
It is, however, an institution with a chip on it's shoulder. It is defyingly Red Brick; if you are an Old Etonian you speak of it only in hushed terms. It remains the product of the Empire with little use for London and certainly none for the upstarts in the Colonies. It therefore came as no surprise that the contempt for American regulation was revealed in such stark terms this week nor the defiance in the manner in which Stan Chart apparently deliberately attempted to evade the spirit and the law in regarding to their dealing with Iran. Unfortunately, and there are many ways for this to occur, there is a better than even chance that in this, an election year, the bank might lose it's American liscense. If that were to occur it would be devastating; indeed, given their lines of business, especially correspondent banking, it could threating the existence of the bank itself.
What they are accused of doing, if true, is quite disgraceful. In my mind it is worse than any of the seemingly weekly scandals that emerge regarding the financial landscape other than perhaps MF Global which is pure theft. But I am also troubled with one aspect of this and the more I think about it the more troubled I become. Forgive me as I take a trip down memory lane to show youwhat I mean.
Many years ago there was a Bank by the name of Libyan Arab Foreign based in Tripoli that was the international agent for the Gaddafi regime. All of it's dollar business went through one New York bank and keeping in mind that the currency for oil is dollars, there was a lot of business. Gaddifi, nut that he was, also felt that it was his duty to give aid and comfort to every terrorist group actively engaged against western values from the IRA to the Red Brigades to the Jackel, to Castro and everything in between. Of course various agencies around the world whose job it was to engage these international killers knew this and since there was only one New York institution with whom Libyan Arab delt, an elaborate "follow the money" operation was set up. It was immensely successful in identifying the participants in this world-wide terrorist network to include the involvment of Soviet client states.
I find it hard to believe that many of these same players were unaware of Stan Chart's activities given the sophistication of today's intelligence organizations. And so I ask myself why in the hell was the State of New York the whistle blower in this situation and was there no coordination between the state and the Feds who after 48 hours maintain a stoney silence. Was something important blown here? And that's why I'm troubled in addition to other issues about which I shall not speculate. I really do hope I'm wrong but I wonder if we shall ever really find out.
No comments:
Post a Comment