Reportedly, the Treasury Department and Federal Reserve are furious at Lawsky's move.
Lawsky's stunning move, which included releasing embarrassing communications and details of the bank's alleged defiance of U.S. sanctions against Iran, is rewriting the playbook on how foreign banks settle cases involving the processing of shadowy funds tied to sanctioned countries.Aside from the question of why the U.S. government is involved in regulating how multinationals deal with foreign countries and corporations, Lawsky seems to be taking the matter to an even more aggressive regulatory level. The Fed and the Treasury in the past would harass multinationals but ultimately settle with them quietly. It appears that's not going to be the style for Lawsky.
Do we have an Eliot Spitzer 2 on our hands that will attempt to shakedown any financial organization for any reason for just one more headline? Quite possibly. There's a lot wrong with the financial sector and the elements of it that cozy up with government. The way to solve this problem is to tear down the moat of regulations that prevent true competition. Lawsky, on the other hand, is about aggressive enforcement of regulations to make a name for himself. Government enforcers like Lasky are very dangerous guys. They never stop enforcing any regulation on the books, no matter how destructive the regs are.