Barclays sweats as sanction-busting banks get hit by fines

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CS said it may pay $536 million (£327.6 million), more than double the $250 million Lloyds settlement early this year for similar acts and far outweighing ABN Amro's $80 million fine.

Barclays, which has admitted it is also under investigation, declined to comment, but has previously said claims could be "substantial".

In a bid to calm nerves about further potential fines, Lloyds today issued a statement saying it did not expect to make any more payments, although it is still in talks with the US Office of Foreign Assets Control over the issue.

The vast scale of the CS fine left investors concerned about future actions by the US authorities into other European banks.

There are believed to be about nine major European banks under investigation over the issue. They have been probed for allegedly stripping wire transfer information to conceal illegal money transfers.

Lloyds admitted using the technique to disguise clients in Iran and Sudan, allowing Iranian banks and their customers to transfer more than $300 million.

One banker with knowledge of the investigations criticised the US authorities' "overzealous" approach, claiming many of the alleged infringements were not serious, involving "mistakes" by managers of small European branches unaware of the sanctions.

One accountant said the breaches could be for merely processing a dollar transaction for a client in one of the banned countries.

Another, from a rival bank, said: "The size of these fines is extraordinary. I guess it's no surprise they're not trying to get away with fining US banks like this. They wouldn't get away with it."

Morganthau was accused today by many in European banking circles of crowing when he said of the CS settlement: "This will be the biggest settlement ever coming to New York. If you violate US sanctions, you're going to pay a big financial penalty."