It seems to me that USA is in this “case” clearly overstepping the line in two ways, politically and economically. First this huge fine on BNPP, because of what its Swiss branch did, means that the choice of the dollar as a currency for trading abroad gives a universal jurisdiction to USA, and that sovereignty of foreign countries, even allied countries of western Europe, is limited. Does not this suddenly ring a bell of the Warsaw Pact ? Is this acceptable ?
Secondly does this sentence not mean an incredible attempt against property rights by the very country which used to epitomize, for itself and the rest of the world, the protection of property rights as an essential part of human rights ? Does this sentence against a European bank mean that dollar denominated assets are a potential property of the Federal Government of USA, as soon as their holders would infringe American law wherever they trade or that they have to raise their hand before using their “ dollar denominated property rights” as they see fit and have to get a permission from their American school master ? Is n’t that a clearcut abuse of power ?
The story of foreign dollars goes like this : once upon a time, in July 1944 before the end of WWII, the free world gathered in Bretton-Woods, having in mind the 30‘s social disaster of “beggar thy neighbour policies” led through competitive devaluation of currencies. There they agreed to create a world monetary order of fixed exchange rates between currencies (except for fundamental imbalances in trade exchanges) based on a dollar gold clause commitment. It is on this basis only that the dollar area sharply increased abroad, whether it be the dollar’s share in central bank reserves or in international trade. Then, for internal reasons USA decided unilaterally to renege on their gold convertibility commitment on the 15th of August 1971, instead of devaluating the dollar against gold according to the BW agreement. Foreign central banks were left with their unconvertible dollar-balances and European firms and banks with their floating euro dollars, and global economy and finance was trapped henceforth in the mess of a melting dollar which resulted in the 2008 financial crisis and the public debt bubble,and with which the rest of the world is still trying to cope. Does this sad story of USA ‘s international monetary irresponsibility (may be inevitable) give a right to the US Government to decide what a foreign bank should or should not do with its dollars abroad (without endorsing BNPP’s choices) ? Had not every-one better clean up its own backyard ?