Sir Mervyn King, Bank of England governor, said he does not believe US regulators are engaging in a trade war against UK banks in the wake of allegations against Standard Chartered.
Speaking at the launch of the bank’s latest inflation report – which slashed medium-term growth forecasts for the UK – the governor also stressed the difference between the Libor scandal and the allegations against Standard Chartered.
Standard Chartered has firmly rejectedUS claims that it “schemed” with Iran to conduct secret transactions worth $250bn (£160bn). The charges helped send shares in Standard Chartered down more than 16pc on Tuesday.
Several senior British politicians have accused the New York regulator of pursuing an anti-City agenda to weaken London’s standing as a financial centre. Boris Johnson, the Mayor of London, warned that the “proper desire to root out wrongdoing” should not become an excuse for “protectionism” and a “self-interested attack”.
But, Sir Mervyn said that he did not believe that US regulators were engaging in a trade war against UK banks. He added that UK authorities would ask that US regulators work together and refrain from public statements before investigations are complete.
Commenting on the differences between the Standard Chartered situation and the Libor scandal – where Barclays was fined $450m for attempting to rig Libor rates used to set the prices of trillions of dollars worth of financial securities – he said:
“It’s very important for people to distinguish between these different episodes. In the Libor one, all the regulators involved, whether it be in the United States or the United Kingdom, produced coordinated publication of reports, which came out after the investigation was completed and they have made their judgements.”
“That’s very different from what’s happened in the Standard Chartered case where one regulator but not the others have gone public while the investigation is still going on,” he added.
“I’m not going to prejudge what that will show, and clearly if there’s been wrongdoing, action should certainly be taken. But one shouldn’t compare the two sets of circumstances, they are very different.”