THE FRENCH government’s attempt to stop US regulators fining national champion BNP Paribas could make the situation worse for the bank, lawyers warned yesterday.
BNP faces a fine of as much as $10bn (£6bn) for alleged sanction breaking, in breech of US laws.
French finance minister Laurent Fabius yesterday said the potential fine was “not reasonable,” and he fears it will hit the bank hard, damaging the rest of the economy.
“These figures could have a negative impact and BNP could see its capital hit and that means less loans, especially for French firms,” the minister said in an interview with France 2 Television.
And the government will raise it with US President Barack Obama when he visits the country tomorrow.
But lawyers do not believe France can sway the US authorities once the scale of the fine has been made public – and the intervention could even inflame the situation further against the bank.
“There is not a cat’s chance in hell of this working. Discreet pressure will sometimes work, whereas public pressure will not,” said Simon Morris of law firm CMS.
“The French are acting at the political level which is the wrong one – it is not right for Barack Obama to put pressure on US regulators, and they would not like it.”
“If this happened at the fine suddenly came in at half its expected level, it sends a message that any politician can get on the phone to the White House and they will cut it in half.”
American regulators have become increasingly tough with banks which have misbehaved.
UK bank Standard Chartered was fined $674m by various regulators over breaking sanctions against Iran, while Credit Suisse paid $2.6bn to settle claims it helped clients dodge US taxes.
US banks have also been hit – JP Morgan was ordered to pay $13bn over claims it misled investors in the run up to the financial crisis.
BNP Paribas and the US authorities declined to comment.