The allegations this week against London-based Standard Chartered Bank raise questions, not just about the bank's viability but also about the efficacy of U.S. laws when it comes to foreign banks. Standard Chartered allegedly violated U.S. sanctions against Iran, and regulators said the bank's executives lied to investigators as part of a cover-up.
The case serves as yet another reminder that U.S. regulations, which have strengthened since the Sept. 11, 2001, terrorist attacks, apparently did not deter foreign banks from laundering money through their U.S. operations.
Republican presidential candidate Mitt Romney has acknowledged that he had money in a Swiss bank account until 2010. Romney says he wasn't trying to hide the money, since he reported the account to the government.
Even so, he closed the account at a time when the federal government was in the middle of a major crackdown on offshore tax havens — a crackdown that has made it harder for Americans to hide their money overseas.
In simplified form: A bank takes deposits from savers, and pays them a low interest rate. Then it lends that money out to borrowers at a higher interest rate. The bank's profits come from the difference between the rates.
Steve Inskeep speaks with Jim Zarroli on 'Morning Edition'
As its stock tumbled today following word that New York State regulators have labeled it a "rogue institution" that allegedly hid about 60,000 secret transactions involving $250 billion in Iranian funds, Britain's Standard Chartered Bank strongly denied the accusations.
It "rejects the position or portrayal of facts as set out in the order," the bank said.