By Neil Irwin, New York Times, July 1, 2014
Even if you are a bank as gigantic as BNP Paribas, $9 billion is a lot of money. Shareholders of the French bank know that all too well, as that is what they are paying in penalties to the United States for a conspiracy to allow money transfers to Sudan and other blacklisted nations.
The case is remarkable for the size of the penalty, which is a bit more than the bank’s total earnings for 2013. But it may be more interesting for the lesson it teaches about how the United States’ financial power goes hand in hand with its role in foreign affairs.
In short: The dollar is the global reserve currency, the bedrock of the world financial system. And that role gives the United States surprising power over what happens in the world even in spheres that would have little to do with finance.
In the case of BNP Paribas, a French bank was accused of (and has now admitted) facilitating transactions with Sudan, Iran and Cuba. These were engineered out of its Geneva office, which covered up transactions with Sudan.
