Bank of New York Mellon: Financial Winner
NEW YORK (TheStreet) -- Bank of New York Mellon (BK) was the winner among the largest U.S. financial names on Tuesday, with shares rising 3% to close at $22.30.
The broad indexes rose for a third straight day, after Federal Reserve Bank of Boston President Eric Rosengren called on the central bank to take "more substantive action than we have taken to date," to stimulate the economy. In an interview with the Wall Street Journal, Rosengren said that the Fed should increase its purchases of securities and state that it will continue to do so "until we start seeing some pretty significant improvements in growth and income."
The KBW Bank Index (I:BKX) on Monday rose slightly to close at 46.12, with all but seven of the 24 index components showing declines.
Following the accusation on Tuesday by the New York State Department of Financial Services (DFS) that the New York branch of Standard Chartered Bank PLC "schemed with the Government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion, reaping SCB hundreds of millions of dollars in fees," while "evading Federal sanctions," and operating "as a rogue institution," the parent company's stock dropped 16% in London trading.
Standard Chartered Bank came out swinging, saying in a press release that it "strongly rejects the position and portrayal of facts" made by the New York regulators, and that the bank "had previously reported that it is conducting a review of its historical compliance and is discussing that review with US agencies, including the DFS, the Department of Justice, the Office of Foreign Assets Control, the Federal Reserve Group of New York and the District Attorney of New York."
The bank went on to say that its analysis was shared with all the agencies, and "demonstrates that throughout the period the Group acted to comply, and overwhelmingly did comply, with US sanctions and the regulations relating to U-turn payments." According to Standard Chartered Bank, "well over 99.9% of the transactions relating to Iran complied with the U-turn regulations," and "the total value of transactions which did not follow the U-turn was under $14m."
Standard Chartered said that it "ceased all new business with Iranian customers in any currency over five years ago," and that because "resolution of such matters normally proceeds through a co-ordinated approach" by the regulatory agencies, it was "therefore surprised to receive the order from the DFS."