By Simon Miller

US regulators are angry at the New York State Department of Financial Services (NYSDFS) "go it alone" attack on Standard Chartered.

According to reports, the Treasury Department and Federal Reserve were taken aback by NYSDFS' order against the bank as it complicated ongoing talks to settle claims over the transactions.

News agency Reuters said that some federal officials were given virtually no notice of the New York move which accused Standard Chartered of being a "rogue operation" over dealings with Iran.

Standard Chartered vigorously denied the accusations and rejected the "position or the portrayal of facts as set out in the order" from the New York State Department of Financial Services.

The order threatens to remove Standard Chartered's US banking licence and saw $17bn wiped off the bank's value yesterday.

A spokesperson for the Federal Reserve told Reuters that it had been working closely with various prosecutorial offices on matters involving Iran and other sanctioned entities, but could not comment on ongoing investigations.

White House Press Secretary Jay Carney said the government takes alleged violations of sanctions "extremely seriously" and the Treasury remains in close contact with federal and state authorities on the matter. The Treasury declined to add to that comment.

Anger is rising in the UK that US authorities may be using regulation to undermine London as a banking centre after US regulators snared Barclays for Libor manipulation and a US Senate panel issued a scathing report criticising HSBC's efforts to police suspect transactions.

Yesterday, Treasury Select Committee member John Mann - who has been an arch critic of UK banking practices - issued a statement calling for a parliamentary probe into money laundering and accused US regulators and politicians of having an anti-British bias in relation to money-laundering accusations.

Mann said the anti-British bias was aimed at shifting financial markets from London to New York.

Calling for a UK Parliamentary inquiry into money laundering, the MP highlighted "secret deals" by US banks such as the Bank of America and Wachovia to close down investigations and ongoing investigations, including into, Nigerian fraud involving Wells Fargo and M&T, Mexican drug cartels such as the Los Zatos and Indonesia criminals in Jakarta using Citibank.

"In particular drug money from Colombia and Mexico is being routinely laundered through US banks, but the US authorities are choosing to highlight British banks rather than their own wrong doings," he said in the statement.

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