The Associated Press quotes Global Business and Economics Program Associate Director Garrett Workman on the political and economic fallout from US investigations into transactions the French bank BNP Paribas may have conducted with clients in Iran, Sudan, and Cuba:
The U.S. imposes financial sanctions on political enemies to hinder their access to the global financial system. The goal is to choke off banks and other sources of capital, limiting their economic growth and their ability to buy weapons, food and other items available through global trade. The sanctions affect both U.S. banks and foreign banks with U.S. operations.
But some criticize American authorities for what they see as a single-minded focus on European banks, while letting U.S. banks slide.
“It’s kind of a worrying trend that the two sides aren’t talking to each other in terms of financial regulation,” said Garrett Workman, an analyst with the Atlantic Council.
Workman said he thought it unlikely that the BNP dispute would scuttle the a European-American free trade deal, but he said the dispute shows the two sides need to open the lines of communication over financial regulation or risk new meltdowns.
“The two sides of the Atlantic are still where 75 percent of the world’s financial transactions take place, so it makes sense that the two sides should be talking more,” he said. “As we saw a few years ago, the entire global financial market is at the mercy of U.S. and European policy.