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MISSION:INTANGIBLE, the blog of the Intangible Asset Finance Society, offers critical comments on intangible asset, corporate reputation, and finance; supplemented by quantitative reputation metrics. Intangible assets include business processes, patents, trademarks; reputations for ethics and integrity; quality, safety, sustainability, security, and resilience; and comprise 70% of the average company's value. MISSION:INTANGIBLE is a registered trademark of the Intangible Asset Finance Society.

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Standard Chartered: Rogue or victim?

C. HUYGENS - Thursday, August 09, 2012
It was a typical week in the banking sector—another regulator and another accusation of bad behavior…with a twist. Standard Chartered plc says it is being maligned and now seeks advice over a countersuit.

According to the Financial Times (9 August 2012, Scannell K and Jenkins P) “Standard Chartered has sought advice about whether it can pursue a legal action against the US regulator that on Monday accused the British bank of being a rogue institution which had funded $250bn of Iranian sanctions breaches. The bank’s legal advisers believe 'there is a case' for claiming reputational damage, according to two people close to the situation, although StanChart is conscious of the delicacy of taking an aggressive stance towards its regulators.”

Through Thursday of last week, Standard Chartered’s reputational metrics calculated by Steel City Re gave no obvious indication of a lurking reputational problem. In hindsight, the trend indicators for reputational ranking were slightly negative. It's reputational ranking has been drifting downward from the mid 80's percentile to 46 among the sector of large banks for a year. This drift may reflect the concerns of an increasingly large number of stakeholders over the eventual findings by five separate investigations on both sides of the pond.

But reputational value volatility, a key indicator of stakeholder uncertainty, had been low for months and most recently was drifting lower still. There are no indications anyone expected anything like this. But for the fact that one of the parties to the dispute is a powerful regulator, the metrics suggest that this may indeed be a tempest in a teapot.

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