IT COULD have been disastrous. Standard Chartered was facing a hearing before New York state’s Department of Financial Services (DFS) on August 15th that would have certainly aired embarrassing information. Instead it will be expensive. The bank has acceded to a fast settlement of the charges that it had illicitly processed $250 billion in transactions with Iran, paying $340m in civil penalties and agreeing to various other provisions.

As a result of the deal, the bank's management is temporarily off the hook for personal liability. Just as important, they will not have to defend the bank's actions before the regulator. The agreement also appears to cap potential penalties which, in theory, could have included losing a critical license to operate in America and thus provide its vast emerging-markets network with cross-border dollar transactions.

Any celebration, however, will be muted. In the agreement, Standard Chartered acknowledged that the scope of its illicit activity was indeed $250 billion, the number put forward by the DFS, and not merely $14m, which the bank initially insisted was the case.

Furthermore, the payment does not stop America’s other regulators from pursuing their own charges. Ordinarily there is a sorting out process between regulators before a settlement, and often before the announcement of charges. But in this case the DFS moved ahead on its own, much to the surprise of Standard Chartered, as well as officials at the Federal Reserve, Treasury and Justice Department.

Even if additional penalties are not assessed, Standard Chartered’s initial response to the DFS's charges raises more questions. In a statement, the bank asserted that it had ceased doing “new” business with Iran five years ago, and that it never did business with people identified at the time as terrorists.

If nothing else, the case has highlighted how Standard Chartered exploited the odd state of regulations that existed during the period when America's sanctions on Iran were not echoed elsewhere. While straightforward transactions with Iran were barred, America permitted “u-turn” transactions that went through the American financial system but did not stay in the country. These had to follow a set of procedures, including being disclosed, established by America's Office of Foreign Assets Control. Standard Chartered was charged with deliberately masking 60,000 transactions between 2001 and 2007 and not informing America for an additional three years.

The bank's initial reaction to the charges was one of indignation. But some form of contrition is often a component of deals like the one it has reached with the DFS. It appears the bank isn't ready for that yet. Reconciling its prior statements with this hefty settlement cannot possibly be easy.