French officials exploded in outrage after BNP Paribas agreed to plea guilty to criminal charges , pay nearly $ 9 billion in fines , and have access to dollar clearing suspended for a year for its persistent violations of US economic sanctions against Iran , Cuba and Sudan . The international bank fell under US jurisdiction by virtue of facilitating transactions in dollars which passed through the US . Most financial commentators had little sympathy with the French position , since the giant bank 's conduct was egregious . It included ongoing records-doctoring to hide the true identity of customers and stymieing the US investigation . But the French argument was essentially political : that the US had no right to impose its will on a foreign bank , and these transactions were legal under European law . Yet this is far from the first time the US has used its position as issuer of the world 's reserve currency to advance its foreign policy agenda . For instance , in the Suez Crisis in 1956 , Britain 's need for dollar credit to defend the pound enabled the US to force Britain and France to pull back from military confrontation . The economic reality is that the US derives considerable power from its role as the issuer of the world 's reserve currency and its control over dollar-based payment systems . Large banks run huge volumes of transactions with each other during the day . They are willing to do so because these systems are ultimately backstopped by the Federal Reserve . While parties unhappy with America 's use , and some would contend abuse , of US dollar dominance , financial institutions could set up dollar transaction mechanisms that completely skirted the US . But with low volumes and no Fed protection , they 'd be vastly higher cost . The other alternative is to try to encourage more use of non-dollar currencies , like the euro and China 's renminbi . But the euro has no benchmark bond , plus continued concerns about political fracture and sovereign bond restructurings mean it 's not a contender to replace the greenback any time soon . And even though China has been aggressively promoting trade denominated in the renminbi , the volume is puny , a mere 1.5 % of the global total . But putting aside the international row , what does the BNP Paribas settlement say about addressing misconduct at too big to fail banks ? Perversely , while banks are wards of the state and get more support and subsidies than any other type of business ( for instance , ZIRP and quantitative easing are massive transfers from savers to financial players ) , the authorities have lacked the will to discipline them effectively . Even though the BNP Paribas fine exceeded a year of earnings , the bank 's stock rose 3.6 % when the deal was announced , saying that investors though BNP Paribas had done well . The conundrum is indicting a bank at the parent level is widely perceived to be a potential death blow , since many counterparties would have to stop doing business with it immediately . Removing the US banking licenses of a serial fraudster , another possible remedy , would similarly put a US firm out of business and would inflict severe , permanent damage on a big foreign bank . Hence the tendency of officials to rely on big , or at least big-sounding , fines . But it is bankers , not banks , that commit crimes . Here , the BNP Paribas deal falls short . True , 13 officers were forced to resign , including one of its chief operating officers . But he was on the verge of retirement , and more important , no one was charged criminally or fined . By contrast , in 1991 , when Salomon Brothers failed to curb a trader that was repeatedly gaming government bond auctions , Salomon 's CEO , vice chairman , and president departed abruptly . We 've seen nothing like that punishment meted out to top executives in the post-crisis wave of investigations . And until that happens , banks will continue to behave as if they have the upper hand . Read more : Why screen stars are battling Europe 's banksRead more : Banks know that customers hate them .
De Rothschild has been fined nearly $ 1 billion in fines for violations of US sanctions . French authorities criticized the fine as excessive and disproportionate . Author Yves Smith says fines such as this have only limited impact on the banks . This will not change until top executives face punishment , Yves Smith writes .