The US Treasury and the Federal Reserve have been angered by the New York banking regulator's surprise decision to accuse Standard Chartered of conducting secret money laundering transactions with Iran.
The explosive allegations by Benjamin Lawsky, head of the recently created New York State Department of Financial Services, complicate talks between the Treasury and the 160-year-old British bank to settle claims over the transactions, Reuters reported, citing sources.
Some federal officials were given virtually no notice of the New York move.
Mr Lawsky's report, full of colourful language alleging "fraud" and a "staggering cover up", threatens to rewrite the rules on how foreign banks settle such cases. In the past they have been almost choreographed with public shaming kept to a minimum.
Several senior British politicians have accused the New York regulator of pursuing an anti-City agenda to weak 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".
The explosive allegations by Benjamin Lawsky, head of the recently created New York State Department of Financial Services, complicate talks between the Treasury and the 160-year-old British bank to settle claims over the transactions, Reuters reported, citing sources.
Some federal officials were given virtually no notice of the New York move.
Mr Lawsky's report, full of colourful language alleging "fraud" and a "staggering cover up", threatens to rewrite the rules on how foreign banks settle such cases. In the past they have been almost choreographed with public shaming kept to a minimum.
Several senior British politicians have accused the New York regulator of pursuing an anti-City agenda to weak 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".
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