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Monday, 7 July 2014

“The European Union should try to get even with the United States, after its financial colonialism against BNP Paribas”; the integral ‘BNR news radio’ column of bank founder and financial expert Peter Verhaar

Ah, I'll get even with you
Ah, that's what I'm gonna do

Peter Verhaar, a general financial expert and co-founder of ‘Alex’ bank – a Dutch bank for online investors –had an intriguing and provocative radio column on BNR News Radio (, last week.

In this must-hear column (in Dutch), Peter made minced meat out of the massive penalty, which BNP Paribas received from the American government, for having traded with countries that were on the United States blacklist of ‘rogue states’: Iran, Cuba etc.

He argued that the European Union – and The Netherlands to begin with – should get even for the events, which occurred during the prelude to the crisis of 2008 and for the involvement of at least one American bank in the derivative trades, which brought building cooperative Vestia almost to its knees.

Peter Verhaar, Co-founder of Alex Bank
in The Netherlands and general financial expert
Picture of: Ernst Labruyère
Click to Enlarge
Here is the integral, translated column of Peter Verhaar:

“Nobody is fooling with the American Justice Department. The Americans know exactly where they can hurt people and companies, breaking US laws: in their wallets and checkbooks. There are no moralistic talks and no sermons are delivered; you just are going to pay… big time, with amounts that really hurt you.

Today, the news will be announced that the largest bank in Europe, BNP Paribas, will be penalized with a €6.5 billion penalty. BNP Paribas’ Swiss subsidiary did business with countries, which are on the United States blacklist of ‘rogue states’. It is a large penalty, but the bank will not implode from it. It is one time the gross annual profit, and with an equity capital of €90 billion, BNP is more than able to pay it.

It is not the first time that the Americans administer penalties for this offence against their laws. Until now, eight European banks have been penalized: the Dutch banks ABN Amro (penalty €370 million) and ING (penalty €450 million) were among those banks.

Criticism from Europe is soaring against these penalties and in the meantime Danièle Nouy, chairman of bank supervision, and even the French president, François Hollande, have participated in the discussions. The penalties could jeoparidize the financial system in Europe and, besides that, the transactions of the Swiss subsidiary of BNP Paribas were not violating French or Swiss laws.

The basis for the sentence is the fact that BNP has an American banking permit, which it does not want to lose. Not just for the reason that BNP Paribas wants to remain active in the United States, but – even more important – just because the dollar is still the currency in which the large majority of international trade actions is denominated. Dollar clearing transactions must always go via the American subsidiary of BNP Paribas eventually.

I can somehow understand the penalty, but now the American Justice Department also wants to exclude BNP from dollar-clearing transactions for the duration of one year. This is serious, as the United States are now radically interfering in the business model of European banks. This goes much too far, as far as I’m concerned, and it is akin to ‘financial colonialism’, as a former Fortis banker wrote in Het Financieele Dagblad ( recently.

In 2008, the large American merchant and business banks sold totally useless products to European banks and pension funds. How long will the European Union leave these actions unpunished? It is about time to get even with the United States and The Netherlands could be frontrunning, in this respect.

Last week, it became all too clear that also an American bank – JP Morgan - has been involved in ransacking Dutch building cooperative Vestia. Nevertheless, this bank does not have to appear before the ‘Dutch Parliamentary Inquiry Commission for Social Housing and Building Cooperatives’.

I say: ’ Let us withdraw their banking permit for the next five years. As a matter of fact, I don’t have to tell you, which banks – and from which country – will be first in line, when the highly profitable assignments will be offered, to help the Dutch state sell state-owned insurance company Reaal and service the IPO of stateowned insurance company ASR. Would I?!”

Of course, the chance that the Dutch state starts the suggested actions against American banks, is that of a snowball in hell, unfortunately. Although the European Union has a much better trackrecord, as far as such actions are concerned – think for instance about the actions from the European Commission against Microsoft and Google – , the chances for such a counter-action against the American banks are still very dim.

Yet, it is an intriguing thought: the American government is making its legislation applicable worldwide, through American subsidies of European and Asian companies.

This is more or less defensible, in my humble opinion, when it concerns crimes and misdemeanors of which the American government or American citizens are direct victims: for instance, when these crimes or misdemeanors are committed against American citizens or the American state, by the American subsidies of European or Asian banks, or when these subsidies are indirectly involved in such crimes.

Things change, however, when the undeniably biased American government enforces its own boycott-laws on the rest of the world, through American-based subsidies of non-American companies:

  • Why are f.i. Iran and Cuba considered rogue states, while Iraq, Afghanistan and Pakistan are not? Is it because the leaders in the latter countries are ‘buddies’ of the American government?! It definitely seems to help, as the ‘failed nation’ stamp is certainly applicable to all these five countries…
  • When European banks do business on European territory with the first two rogue states on a fully legally approved basis AND by using the Euro as their trade currency, it is none of the Americans’ business, in my humble opinion.
    • The US has its own laws, but so does the European Union. US laws are therefore not universal laws and should not be treated as such!
Besides that, I fully sympathise with Peter Verhaar’s vision that some of the American banks – you can guess which ones – played a more than prominent role in firing up the credit crisis among the European countries and banks as well.

Deeds, for which a severe punishment still seems fair.

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