By Georgie Keate
Senior MPs accused New York regulators of an "anti-British bias" today, amid US allegations that Standard Chartered schemed with Iranian clients to avoid sanctions.
The UK bank's shares dropped dramatically yesterday by 20%, their worst in decades, after New York's State Department of Financial Services charged them with money laundering $250 billion.
John Mann, a Labour MP on the Treasury committee, claimed New York's "disproportionate publicity" of UK banking problems was an attempt to sabotage London's financial reputation.
"I think it's a concerted effort that's been organised at the top of the US government. I think this is Washington trying to win a commercial battle to have trading from London shifted to New York," Mann argued.
The Bassetlaw MP called for a parliamentary inquiry into the scandal to clear up the "political onslaught" of allegations against banks.
"The British parliament should instigate an unbiased and far-reaching investigation into money laundering in Britain, involving British banks and the endangering of the well being of British interests and the British people."
Only last month, a US Senate committee accused HSBC of laundering money from Syria, Iran and Saudi Arabia as well as drug money from Mexico.
London mayor Boris Johnson also came out with a warning to New York regulators, saying they should not take part in a "self-interested attack on London's status as the pre-eminent financial centre".
Some suspect US authorities of focusing on London in a bid to avoid the problems on Wall Street.
Labour MP Pat McFadden mocked US regulators for pretending New York was "some kind of perfect financial nirvana".
Tory MP Sam Gyimah said the Standard Chartered was "inflammatory", while his colleague Kwasi Kwarteng hinted American regulators were aiming for "a high-profile scalp".
Standard Chartered was accused of hiding almost 60,000 transactions from regulators and are threatened with losing their New York licence.
The bank says it "strongly rejects" the allegations and will be defending their position to US regulators on August 15th.