The arm of the US law is long, but it doesn't reach everywhere. Authorities extracted a guilty plea from Credit Suisse on May 19 for helping Americans avoid taxes. The same day, it also charged five Chinese military officers with hacking. The Swiss bank expressed remorse and coughed up a $2.5 billion fine; China responded with defiance.
Credit Suisse's admission of guilt - the first by a large financial institution in two decades - is the latest instance of banks bending to the US government's will. Foreign lenders have already choked off financing to suspected terrorists and countries like Iran and North Korea for fear of large fines or even the threat of losing their New York licences. Being cut off from the world's largest economy would be so severe that no institution can afford to take the risk.
The Chinese hacking allegations are less familiar territory. Prosecutors say officers with online nicknames like UglyGorilla and KandyGoo penetrated the networks of several large American corporations and appropriated passwords, emails and financial data. Investigators even showed how the suspects took their lunch breaks on Shanghai time.
The real point may be to aid the US government at home. Credit Suisse's confession helps soothe public anger at the government's perceived reluctance to punish rogue banks. The hacking indictment could deflect attention from the ongoing controversy about the US government's own state-sanctioned eavesdropping, while reinforcing the argument for keeping tabs on foreign powers.
Even so, the two cases suggest that where global authority is concerned, finance might be a lagging indicator. As long as the US dollar remains the world's reserve currency, America can exert its authority over banks around the world. In cyberspace, its power is already much more limited.
Credit Suisse's admission of guilt - the first by a large financial institution in two decades - is the latest instance of banks bending to the US government's will. Foreign lenders have already choked off financing to suspected terrorists and countries like Iran and North Korea for fear of large fines or even the threat of losing their New York licences. Being cut off from the world's largest economy would be so severe that no institution can afford to take the risk.
The Chinese hacking allegations are less familiar territory. Prosecutors say officers with online nicknames like UglyGorilla and KandyGoo penetrated the networks of several large American corporations and appropriated passwords, emails and financial data. Investigators even showed how the suspects took their lunch breaks on Shanghai time.
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The People's Republic has dismissed the charges as "made up". But it matters little, because Chinese cyberspies face few consequences. Featuring on a Federal Bureau of Investigation "Wanted" poster may limit their choice of holiday destinations. But as long as they avoid countries that have an extradition treaty with the United States, there is little to stop government-sponsored hackers from honing their "spearphishing" skills.
The real point may be to aid the US government at home. Credit Suisse's confession helps soothe public anger at the government's perceived reluctance to punish rogue banks. The hacking indictment could deflect attention from the ongoing controversy about the US government's own state-sanctioned eavesdropping, while reinforcing the argument for keeping tabs on foreign powers.
Even so, the two cases suggest that where global authority is concerned, finance might be a lagging indicator. As long as the US dollar remains the world's reserve currency, America can exert its authority over banks around the world. In cyberspace, its power is already much more limited.