Two days after state banking regulators reached a $340 million settlement with a major British bank, Gov. Andrew Cuomo is out with an op-ed in the New York Post today, making the case for strong government regulation of the financial markets.
The subject matter is a bit dense, but Cuomo essentially holds up the Standard Chartered settlement as an example of the importance of the state Department of Financial Services — a state agency that was created early in Cuomo’s tenure by merging the now-defunct Banking and Insurance departments. (DFS Superintendent Benjamin Lawsky, a longtime Cuomo ally/aide, alleged that the bank had laundered money to hide $250 billion in transactions with Iran.)
From Cuomo’s op-ed:
The recent Standard Chartered settlement demonstrates that this new financial regulatory system is working. The Department of Financial Services confronted Standard Chartered for masking more than $250 billion worth of transactions with Iranian state-owned banks, private banks and unidentified corporations.
The bank’s actions were not only illegal, but dangerous. Iran’s money-laundering is not just a banking concern, but an issue of national security. Our national and state policy is to cut off the global financial lifeline upon which state-sponsored terrorism depends — and our regulators must have the resources and the power to enforce that policy.
Once the agency’s investigation determined there were egregious violations of law and regulation, it acted quickly and deliberately. Within a week of its announcing action, Standard Chartered agreed to pay a $340 million fine — the largest ever collected by New York state banking regulators.
Cuomo argues that a “good government regulatory system is the financial markets’ best friend,” and that strong regulators protects those ethically following the law.
“The Department of Financial Services proves that effective and efficient regulation is not bad for business,” Cuomo wrote. “It protects the good actors and builds investor confidence — and that is good for everyone.”
(Photo via Cuomo’s official Flickr.)