It was just another small story on the business pages and in the blogs devoted to economic news: The U.S. got BNP-Paribas — France’s largest bank — to agree to plead guilty to a felony and pay a nearly $9 billion fine, as well as fire some executives and accept some restrictions on its business.
The fine was larger than normal and amounts to about a year’s worth of BNP’s profit. But it was not spectacularly large. Wall Street banks and their foreign rivals have paid out $100 billion in fines to the U.S. government since the financial crisis five years ago and over half of that total in the past year. (Financial Times, March 25)
If you look at the list of banks, their fines and what they did to become a target of government enforcement, it appears that large banks might have made fraud part of their business plans. In the current deregulation of capital, getting caught and paying a fine are just part of the risks of doing business.
The British-based bank HSBC paid $1.9 billion for money laundering, aiding tax evasion and violating U.S. embargoes. Credit Suisse paid $2.6 billion for its involvement in U.S. tax evasion. JPMorgan Chase paid $2 billion for its involvement in the Bernie Madoff Ponzi scheme. The Merrill Lynch division of the Bank of America paid a fine for overcharging its customers. On July 13 news broke that Citicorps and the government had reached a $7 billion deal over Citicorps’ sale of inflated mortgage securities.
Here are some other examples of different kinds of “violations.” In 2012, ING, a Dutch bank, paid a fine of $619 million for violating the U.S.-imposed embargo on trade with Cuba. Standard Chartered, a British bank, paid $667 million for a decade of violating the U.S. embargo on trade with Iran.
But BNP-Paribas did not violate the laws of France or the European Union when it did its deals with Iran, Myanmar and Sudan. It did ignore a 2007 warning from Stuart Levey, then Under Secretary in the Treasury for Terrorism and Financial Intelligence, and did not take the proper posture of contrition, which is customary for U.S.-based financial institutions caught in similar straits.
BNP ignored the U.S. laws that declared all transactions in U.S. dollars, wherever they occur — even outside U.S. territories — fall under the jurisdiction of the United States. These laws require foreign financial institutions to regularly turn over vast amounts of data on their customers’ accounts.
The U.S. dollar is used everywhere. It is the only currency with a worldwide reach. The U.S. dollar is used in a majority of global financial transactions between corporations. Even in the Eurozone, a significant amount of trade is conducted with dollars. The development of data processing tools that allow the flux of world trade to be monitored in real time is the key to U.S. financial power.
BNP-Paribas could not have survived its exclusion from the New York financial markets. Its customers would have gone elsewhere
A number of articles in the French press point out that the U.S. is trying to supplement its military power — which has shown its weaknesses in Afghanistan, Iraq and Syria — with the exercise and intensification of its financial power, whose development was spurred on by 911 and the U.S. decision to deny funding from or to whomever Washington defines as “terrorist.”
The alleged need for the United States to “combat terrorism” is just a smokescreen for developing tools to discipline its partners/imperialist competitors like France, Germany and Great Britain and to disrupt the economies of socialist countries like Cuba and north Korea, or countries the U.S. considers enemies like Sudan and Iran.