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Tuesday, August 7, 2012

The hits keep coming: Another big UK bank suffers billions in losses

(Reuters) - The market value of Standard Chartered Plc tumbled $16 billion on Tuesday after New York's bank regulator threatened to tear up its state banking license for allegedly hiding $250 billion in transactions tied to Iran.
The New York State Department of Financial Services (DFS) slammed Standard Chartered as a "rogue institution" that "schemed" with the Iranian government, which is subject to U.S. sanctions over its nuclear program, and hid 60,000 secret transactions to generate hundreds of millions of dollars in fees over nearly 10 years.
Shares in the Asia-focused bank were down 23.5 percent at 11.25 pounds by 1120 GMT, their lowest in three years, taking their losses to 30 percent since the news surfaced just before Monday's close.
"Even the so-called 'safe' banks like StanChart and HSBC seem to be crumbling, with their reputation in tatters. No one, it seems, is immune," said one institutional investor, who asked not to be named.
"Some of the language used is very disturbing. Of course, it could be that the Americans are exaggerating, but somehow that doesn't seem to be the case here," the investor said.

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