French Bank Comes Clean

BNP Paribas reportedly paying U.S. $9 Billion for illegal trades.
5:12 | 06/23/14

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Transcript for French Bank Comes Clean
Okay. It is Monday June 23 markets a new Yorker open at today's big number nine billion dollars that. -- how much the French banking giant B&B Aramis will pay US authorities -- great Wall Street Journal. Also an investigation at the bank hid billions in transactions that violated. US sanctions. I'm Dan Butler in New York Jeff MacKey a guy who finances -- -- and all the details -- this Monday morning -- -- -- -- We're particularly with chase maybe Deutsche Bank but what -- BNP tells little bit about back story and that's one. Well it's just an enormous French based bank and as a bank domicile -- -- on the front to have more of -- Lasik affair. Which -- French -- we just don't care. Type of attitude towards international sanctions the French attitude is much more long lines you know listen we don't really care what this -- until. We just -- wanna do banking with them and and that being the case they've done bank they've done business with the Sudanese government's. With Syria whether other countries that America finds unseemly. If you will. Apparently they tried to disguise those actions from US regulators US regulators -- whiff of it. Nine billion dollars is going to be the -- Yeah okay it's it's always getting a little painful when and -- caught in the cookie -- so the details behind this. Nine billion dollar settlement that is some years in the making. Lots -- years in the making it an American officials -- this -- and boy it's been -- I want I -- not be cynical but you know what can we help on this one America -- We've been ever since really the financial crisis we've been looking as a regulatory being. Around a pretty much -- banks ever -- around the world for violations that we've been -- these will be huge fines. And -- looks terrific on the front page these newspapers I'm not sure what behavior changes and certainly hasn't helped the mortgage situation in the US. No one has really track exactly where the money goes in this particular situation. BMP gets shaken down but it and you could argue were you so inclined and where -- -- Senecal. That perhaps BNP makes nice target specifically because they're not a US bank and they are four. It makes -- easy to pick on them just like we -- our Credit Suisse get slapped around a few weeks ago. What wanted to ask -- but that's how -- US impose those kind of penalties on foreign bank. Well you you know it adds if you wanted to business here you gotta pay for basically and so with -- as one of errors issues where. The US doesn't really -- to start a trade war over -- and are not willing to and so as with all these banking finds. And this includes whether it's BankAmerica in the states JPMorgan. CD Credit Suisse. The balance the regulators are looking for is a fine that looks super duper good on -- front page of -- newspaper but doesn't put the bank on a business. And so you get a lot of settlements that involve -- huge dollar figures are not really sure where the money goes a win it gets. Sort of distributed out to these -- and victims here were to be hard to find in this case. But it also is that function -- you don't want the banks to lose their banking license in the states. So hot reg US regulators officiate as are out of they'd be imposed fines on a French bank while they say if you don't want elevate our rules you don't bank here. And it turns out the US is a huge economy and so BNP really has to do business. It's just a matter of paying what amounts to -- would -- glorified kickbacks to the officials. Let me ask you about this instinct -- came out of a settlement according the Wall Street -- -- BNP is now facing. A temporary ban in trading in US dollars a how's that gonna hurt the bank. Well Ed dead. I'd really is attacking something that's gonna go away it wouldn't affect them in terms trading in US dollars. And that's been one of the proms at the root of this is that they did they did it being a French bank they can do business. With the Sudanese -- -- -- journeys as long as they take that business and they they base it. In foreign countries and France and -- specifically but what happens is. They didn't when -- translator when they fail to translated -- US currency becomes a violation and so what they're doing. The regulatory level is -- cracking down on the trading in dollars are gonna Barbie and currencies specifically the US dollar. That impacts BMP bit less than you might think because a lot of these banks are getting on the trading business entirely. It's going away because of the idea that it just takes on too much risk so BNP is gonna go waking -- streaming they're gonna say you know what. OK we won't trade these currencies want to cut down is trading desks. It sounds good down but the problem is that trading of US currency itself will not go away. It goes out to less regulated hedge funds and Heather murkier areas of the financial world. Where the regulators really want to have any control over whatsoever. -- and so -- and he writes that big check for nine billion dollars mr. -- I gotta say I'm impressed that you didn't use the phrase French toast at one point. During this report by. I -- -- saving -- -- or my -- I'm gonna want opt my beret is off to you mister -- have a very good Monday -- Yahoo! finance joining us thank you so much there. Of course you get the latest headlines right here on -- dot -- -- -- much in the New. York.

This transcript has been automatically generated and may not be 100% accurate.

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