January 13th, 2011
Missing a large part of the story on diplomats and banking
By Dan Kubiske
First posted at Journalism, Journalists and the World.
The Washington Post is following up on an earlier story about how U.S. banks are looking to end servicing diplomats and diplomatic missions in the United States. (J.P. Morgan Chase to end services for diplomats; other banks ready to follow)
To bad the writer missed the impact the move could have on U.S. businesses and — as a result — the U.S. economy and Main Street America. (But I am not surprised.)
As the story noted, the J.P. Morgan move comes after Bank of America closed out the accounts of the Angolan diplomatic mission to the United States in November.
Back in November I noted that this was a major story that has serious repercussions for media outlets and U.S. companies:
So why is this an important story? Why is it important to journalists and journalism organizations?
One simple word: Retaliation!
Already the Angolan government is showing its displeasure with the bank action by refusing to accept the credentials of the U.S. ambassador-designate to Angola. (The Angolan government says the U.S. government needs to do more to force the banks to accept their accounts.)
On the horizon, the governments could cancel permission of U.S. banks to operate in their countries. They could also freeze or cancel the local banking accounts of companies such as Exxon Mobil and Chevron. This latter option is already being discussed in Angola.
The few U.S. news outlets that have international correspondents and bureaus, could find their overseas accounts frozen. This would lead to an inability to pay stringers, local staff, interpreters and — in general — local expenses.
Add to the inability of news organizations to operate overseas the impact banking retaliation could have on the overall U.S. economy. How much trade do you think will get done if U.S. companies are not allowed to have accounts in overseas’ banks? Not a lot is the correct answer.
And the U.S. economy depends on trade.
There is little that can be done about forcing banks to handle diplomats’ accounts. But the media could at least begin explaining the potential consequences of the banks’ actions on the American economy. It would have been nice if the post had looked at this issue as well as showing off its “knowledge” of diplomatic finances.