Page 54 - Monocle Quarterly Journal Vol 1 Issue 1 Q4

BANKING
“ e next four most pro table companies listed are all Chinese banks, none of which seem to have been ned for any transgression at all over the past decade.”
To properly consider the extent to which nes against banks have become blood-sport in international and regional politics, and in order to measure the extent to which these nes have steadily eroded the ability for banks to maintain their status as independent private sector entities, one has to properly examine the full history of banking nes levied globally since the advent of the Financial Crisis of 2007 and 2008. Oddly, other than certain studies conducted by the Financial Times itself – who seem to keep a database of nes as they are levied – there would appear to be a dearth of structured information in a single dataset from which to analyse the phenomenon of government nes against banks. As such, the Monocle Research Team made a decision in early 2016 to begin to collect data in respect of banking nes globally.
A few preliminary remarks need to be made before the data that was collected can be analysed. Firstly, the Monocle Research Team made the decision to restrict the database to nes levied against parent bank entities domiciled within G8 countries, and levied by legislative institutions themselves domiciled within G8 countries. is meant that nes levied against Chinese banks, as an example, would not be considered, nor for that matter against Norwegian or Icelandic banks. It would also mean that nes levied against US banks by Chinese authorities would not be considered either.
e rationale behind this call was not random or convenient but was based rather on the observation we had made somewhat subjectively that very little information is available in respect of non-G8 domiciled regulatory or legislative organisations levying nes against banks whatsoever. It would appear that the US authorities have a hands-o approach to Chinese banks, and that Chinese authorities tend to have in tandem a hands-o approach – at least within the public domain – to US banks.
It is important to note that this is not a trivial point. In the latest Fortune 500 list of the largest private rms on earth, the most pro table company worldwide was Apple, with a pro t in excess of USD 50 billion. e next four most pro table companies listed are all Chinese banks, none of which seem to have been ned for any transgression at all over the past decade. In contrast, as shall be examined below, the four largest US banks have experienced the deleterious e ects of signi cant nes from a number of Federal and State organs over the past decade, often of such magnitude as to substantially erode pro ts and capital.
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