NYS Bank Regulator to Treasury: Drop Dead

“Pursuant to the statutory powers vested in him by the People of the State of New York . . . [and] extensive investigation included the review of more than 30,000 pages of documents, including internal SCB [Standard Chartered Bank] e-mails that describe willful and egregious violations of law.

For almost ten years, SCB schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, and reaping SCB hundreds of millions of dollars in fees. SCB’s actions left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes, and deprived law enforcement investigators of crucial information used to track all manner of criminal activity.

-NYS Department of Financial Services

Benjamin Lawsky, head of the New York State Department of Financial Services, has declared that the Treasury Department and the Federal Reserve is “too corrupt” to be involved in NY’s actions against money launderers and Iran sponsors at Standard Chartered bank.

At least, that corruption is what was implied by his actions (note those are my words, not his). Lawsky refused to give Tim Geithner or Ben Bernanke or anyone else at Treasury or the Fed any advance notice of pending legal/regulatory actions. Sorry, Treasury, he seemed to be saying, but your track records preceded you.

Good for him.

I wish more state regulators, attorneys general, and banking supervisors would distance themselves from all Federal relations. At least, until the regulatory incompetence, which came into full flower under George W. Bush and continues unabated under Barrack Obama, com es to its miserable end. We have a Republic, with separate rules for state and national regulations. It is apparent to all that nearly all Federal regulators, other than the FDIC, have dropped the ball.

Start with the corruption of the Treasury department going back to Robert Rubin. His tenure, working in concert with Alan Greenspan and Phil Gramm, was where the office of the Treasury Secretary turned into a Wall Street subsidiary. The revolving door policy was in full view. Once Treasury was corrupted, it was a short hop to the rest of the oversight infrastructure taking their level of regulatory capture to new levels. That would be during the BUsh administration.

This Treasury Department, like the one that preceded it, along with Congress and the White House, have proven themselves to be utterly incapable of overseeing the banking industry. Rather than adhere to this betrayal of the public trust, Mr. Lawsky decided to do something amazing: He actually followed the law. The rest of the regulatory sector should take note.

Have a read of the paragraph at the top of this page to see how prosecution of banking felons and their crony capitalist allies is supposed to be done.

We live in the Banana Republic formerly known as the United States. Its time to turn this nation back into a Democracy . . .

Sources:
August 6, 2012: In the Matter of Standard Chartered Bank, Order Pursuant to Banking Law § 39

Treasury Department and Federal Reserve were blindsided and angered by New York’s banking regulator
Carrick Mollenkamp and Emily Flitter and Karen Freifeld
Reuters, Wed Aug 8, 2012
http://www.reuters.com/article/2012/08/08/us-standardchartered-iran-idUSBRE8750VM20120808

This post originally appeared at The Big Picture and is posted with permission.

4 Responses to "NYS Bank Regulator to Treasury: Drop Dead"

  1. McWatt   August 9, 2012 at 10:56 am

    "Catch-22 says they can do anything we can't stop them from doing."

  2. benleet   August 10, 2012 at 12:20 pm

    The public may not be able to prove criminal behavior for the financial crisis that destroyed 20% of the household net worth in 2 years and stripped 39% of the savings from the median household, but the legal proof notwithstanding, we smell a rat.

  3. LRW   August 14, 2012 at 3:39 am

    The word TRAITORS fits well for the financial sector of this country. The Banks, Wall Street are an obscene and dangerous corruptive spirit that has infected every facet of government. The Federal Reserve has run like its own sovereign empire since it's inception. Its always been a front for gangsters…and now WE the people, FOR the people, BY the people need to remind ourselves that, our country is worth fighting for. We are responsible for our country, our character, our values, our freedom.

  4. carne asada   May 21, 2013 at 6:13 am

    A restaurant food warmer is an integral part of any restaurant business. They keep food warm and are supposed to also maintain the quality of the food. However, not all do this as well as they should. A lot of older restaurant food warmers use fans to circulate hot air. Think about that for a moment.