Financiers may grumble that the United States is acting like an imperial power in punishing foreign banks for dealings far beyond U.S. territory

Financiers may grumble that the United States is acting like an imperial power in punishing foreign banks for dealings far beyond U.S. territory, but in the end they are more likely to bow to Washington than kick against its dollar muscle. Last week, French politicians and business leaders demanded an end to the global dominance of the U.S. currency - and hence of the U.S. banking system - after a New York court fined French bank BNP Paribas $9 billion for doing business in Sudan, Iran and Cuba. Yet despite irritation at the long reach of U.S. sanctions, most bankers see that as wishful thinking. Instead, major lenders in Europe and Asia are reacting to the steady flow of punishments from the United States by doing ever more to comply with U.S. laws and by cutting business ties in countries Washington dislikes rather than risk its wrath and, in the worst scenario, risk exclusion from the dollar system. Official regulators outside the United States are starting to look at ways to prevent their own banks and markets from being damaged by the scale of U.S. penalties. But for now, each bank on its own has little choice but to toe Washington's line. "The demands placed on banks to know their customer's customer, even in countries where such records are not routinely kept, means that banks have little choice but to terminate relationships or risk eye-watering, balance sheet altering fines," said Anthony Browne, chief executive of the British Bankers' Association (BBA). The BBA estimates Western banks have cut hundreds of relationships with correspondent banks in emerging markets, hurting businesses, governments and people in poorer countries.