US regulators seem to be taking it in turns to tee off on UK banks at the moment over alleged money laundering. First it was HSBC aiding and abetting the Mexican drug cartels, now it's Standard Chartered flouting restrictions on dealing with (shudder!) Iran, thereby apparently leaving Uncle Sam exposed to terrorism. HSBC has, reluctantly, sort of fessed-up, but StanChart is, at least for now, strenuously denying the charges.
It's a bit of a mystery why it's mainly UK banks in the frame here, though since the BP-Horizon disaster, ill-informed Brit-bashing seems to play well on both Wall Street and Main Street. In addition, there's more than a little suspicion that US regulators, especially the ambitious new New York State guy who's going after StanChart, may be using their muscle to try to curb London's pre-eminence in international finance.
The plain fact of the matter is that every bank of any size in the world, regardless of where it's domiciled, is undoubtedly laundering money every day of the week. Even with the best possible internal controls, it's impossible to detect every single attempt at using the banking system to clean dirty money. There are just too many ways to do it; compliance departments, which have become massive in recent years, simply can't keep up with all the tricks of the trade.
It's a different matter if a bank is wilfully disobeying clearly-defined national laws, which seems to be part of the case against StanChart, though one which the bank itself denies. The activity itself is, however, essentially unstoppable, as every New York bank smugly watching HSBC and StanChart getting put through the wringer knows perfectly well.
The US could, of course, put an immediate stop to money laundering by drug barons, by legalising and then controlling the distribution of drugs. After all, just about all the money being laundered originates in the US anyway. It's been clear for years that if there's a "war on drugs", the drugs have won. Just don't expect anyone to admit that.
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