BNP Paribas > $ 10,000,000,000

My Orchids. Phalaneopsis "Lys de France". Photo ET

BNP Paribas > $ 10,000,000,000

In an article today, the Wall Street Journal carries a lengthy report about BNP Paribas’ problems with the US Justice Department and regulators. It is an elaboration on former news, where the bank faces allegations of doing business with sanctioned entities, such as Iran or Cuba. In the time frame of 2 months, expectations about possible fines went from $1.1 billion, to $ 5 billion to now more than $10 billion. That is $ 10,000,000,000. The bank is expected to withstand that shock.

It is not clear yet if criminal charges or a guilty plea are considered. Though the mood is leaning more towards tougher punishments, and critics have coined the expression “too big to jail”, playing on the other idiomatic expression “too big to fail”.

The WSJ also reproduces the following graph of the most important fines financial institutions incurred for violating the OFAC sanctions list or other money laundering provisions:

BNP Being Investigated by N.Y., Federal Regulators

My Orchids. Phalaneopsis. Whiter than White. Photo ET

BNP Being Investigated by N.Y., Federal Regulators

The Wall Street Journal reports:   

" The Paris-based lender said Thursday it set aside $1.1 billion for possible violation of laws, in particular those of the U.S. Treasury's Office of Foreign Assets Control, related to transactions dating from 2002 to 2009."

A violation of the only OFAC list costs an arm and a leg. Though this investigation covers a time period before 2010, it is amazing that still today financial institutions treat this risk with benign neglect. Or worse, that willfully might try to circumvent the provisions of the law. And many foreign financial institutions might ignore the long arm and the reach of OFAC compliance, until one element of a transaction banned by OFAC hits US shores.

The record fines until now were paid by HSBC last year, at $1.92 billion!