Benjamin Lawsky: A state regulator generates controversy

DESPICABLE criminals, eye-popping sums of money and doughty defenders of the law are a marketable mix, as any comic-book author can attest. They also tend to feature prominently in the speeches of Benjamin Lawsky, the head of New York’s Department of Financial Services (DFS). The agency is said to be about to agree on a settlement with Deutsche Bank for its alleged part in the manipulation of LIBOR, a benchmark interest rate. If it does, expect another stentorian statement.

The DFS was created from the merger of two existing state regulators in 2011, at the behest of Andrew Cuomo, New York’s governor. He appointed Mr Lawsky, his former chief of staff, to run it. Although the Federal Reserve, the Federal Deposit Insurance Corporation and federal prosecutors typically take the lead in keeping banks honest, any big international bank must have an operation in New York—and it is Mr Lawsky who hands out most licences for that. This has allowed the DFS to elbow in on investigations of all manner of wrongdoing, and along with America’s national regulators, extract massive fines.

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