Big Banks: Is It the End of Too Big to Jail?

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May 14 (Bloomberg) -- U.S. prosecutors are seeking more than $3.5 billion from BNP Paribas SA to resolve federal and state investigations into the lender’s dealings with sanctioned countries including Sudan and Iran, according to people familiar with the matter. Bloomberg’s Keri Geiger reports on Bloomberg Television’s “Bloomberg Surveillance.” (Source: Bloomberg)

York prosecutors?

This is about new york prosecutors.

We have a starting point that could be a pretty big fine for bnp paribas.

There are a lot of people negotiating this.

We have the manhattan das office, and we have the new york state banking regulators at the table.

I don't care about the headlines, there is always a backstory to these negotiations.

We have to look back to what i find to be pretty interesting as an anecdote in these cases.

Two years ago, standard chartered was in similar hot water.

Peter sampson and crew.

They had paid $340 million to settle this, but in the middle of the process the department of financial services and the u.s. banking regulators threatened to pull them and that, to me shows that they can really affect the pressure on us to get the settlement to where they want to get, maybe move it forward quicker.

But pulling the license of a bank in new york state would be a pretty serious thing that would hurt business.

The critical distinction is criminal charges.

Typically this is negotiated.

As it was pointed out to us -- there is a whole cascade if a bank is guilty of criminal charges.

What has changed with a bank in that?

I don't think anything has changed with the bag, what changed is what prosecutors want to show, that they can go after a bank and what eric holder said is that the banks are not too big to jail.

They are cracking down hard and showing that they can do this.

To your point we don't know what the effects will be.

We talked about this before and this is an unknown entity.

We don't know what the collateral damage is.

What the market is telling me is that the best case will be -- with bnp paribas.

Companies doing business with credit suisse will not be able to do business with credit suisse anymore if they plead guilty.

This could be a big change.

The difference between the bnp paribas discussion and the credit suisse discussion, it will not necessarily be that kind of number four credit suisse.

We are looking at the distinction of the case, credit suisse is allegedly -- it has helped allegedly -- it has allegedly helped u.s. citizens avoid paying taxes.

Bnp paribas is a sanctions issue, we have many banks who settled over the years over violating sanctions protocol in the u.s. and they settled.

What we are interested in finding out is what is different about this case, the bnp paribas case, where they will not settle, and paid his big fine of $3.5 billion.

It will essentially be a lot more serious than previous cases.

Including standard chartered, which settled.

Credit suisse will also likely have a guilty plea.

They use the department of justice to negotiate with credit suisse with a similar model, these cases are running parallel, and what we look at is a guilty plea and a fine.

You ran sachs fifth avenue and now -- what would be your corporate responsibility as a ceo, doing business with a bank that is found guilty of these charges?

That is really of concern and it would affect our behavior.

We have a lot of alternatives and we have a lot of companies we work with, and if you have a situation like this, i think that we would be majorly concerned.

Did that happen this week?

We hope it will be happening in the next couple of weeks.

This text has been automatically generated. It may not be 100% accurate.

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