World View: Swiss Bank with No U.S. Branches to Close After DOJ Indictment

World View: Swiss Bank with No U.S. Branches to Close After DOJ Indictment

This morning’s key headlines from

  • New fighting between India and Pakistan in Kashmir
  • Switzerland’s Wegelin bank to close after U.S. indictment
  • Three scenarios for an accidental South China Sea war

New fighting between India and Pakistan in Kashmir

India is blaming Pakistan for an “unprovoked attack” by Pakistaniforces crossing the Line of Control (LoC) separating the Pakistani andIndian controlled portions of Kashmir, and killing two Indian soldiersand wounding a third. The body of one of the dead men was found badlymutilated and beheaded on the Indian side of the border. Thisincident follows by two days the wounding of two Pakistani soldiers ina firefight at the LoC, as we reported. Kashmir has been mostly peaceful in the last few years,though there were a number of conflicts at the LoC since the end ofthe bloody, genocidal 1947 war between Hindus and Muslims whoseepicenter was Kashmir. However, there are large Pakistani and Indianarmies on their respective sides of the Line of Control, and newhostilities could break out at any time. Global Post

Switzerland’s Wegelin bank to close after U.S. indictment

Wegelin & Co, a private Swiss bank founded in 1741, will close itsdoors, after pleading guilty in U.S. district court to violatingAmerican laws by keeping the names of American depositors secret.The bank had no offices in the United States and was not violatingany Swiss laws, but somehow they were guilty of violating Americanlaws anyway. 

The Obama administration is vigorously investigating and chargingforeign banks that it believes are violating secrecy laws. Banksunder criminal investigation include Credit Suisse, UK-based HSBCHoldings and three Israeli banks, Hapoalim, Mizrahi-Tefahot Bank Ltdand Bank Leumi.

Long-time readers can easily guess what I’m going to say next. TheObama administration has adamantly refused to investigate and chargeCitibank, Bank of America, and other banks that made big campaigncontributions to Obama, even though it’s provable that they committedmassive fraud that created the financial crisis. (See “Financial Crisis Inquiry hearings provide ‘smoking gun’ evidence of widespread criminal fraud”

Instead, they go after foreign banks that committed far lesser crimes but never made any contributions to the Obama campaign. It’s a joke.Reuters

Three scenarios for an accidental South China Sea war

With China’s aggressive military buildup, and with nationalismincreasing in China and in the countries of the surrounding region,the risk of an armed clash in the South China Sea that would involvethe United States and China is significant. There are at least threepossible scenarios: 

  • A clash stemming from U.S. surveillance activities in the South China Sea, which the U.S. insists it has the right to do, while China insists that those activities violate Chinese and international law. China has militarily intercepted U.S. ships in the past, and a future confrontation might force the U.S. to respond militarily.
  • Under contract from the Philippines, a UK-based energy firm plans to start drilling for gas in Reed Bank this year. Reed Bank is clearly in the Philippines’ exclusive economic zone (EEZ), but China has harassed and threatened Philippine surveillance ships in Reed Bank in the past. If there’s a conflict between China and the Philippines, the U.S. could be drawn in because of a 1951 mutual defense treaty with the Philippines, which says:

    Each Party recognizes that an armed attack in the Pacific Area on either of the Parties would be dangerous to its own peace and safety and declares that it would act to meet the common dangers in accordance with its constitutional processes.

  • Similarly, Vietnam is pursuing drilling rights in the South China Sea. A military clash between Vietnam and China is less likely to draw in the U.S., but it’s still a possibility.

Council on Foreign Relations

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