Some federal officials were given virtually no notice of the New York move.



Mr Lawsky's report, full of colourful language alleging "fraud" and a "staggering cover up", threatens to rewrite the rules on how foreign banks settle such cases. In the past they have been almost choreographed with public shaming kept to a minimum.



Several senior British politicians have accused the New York regulator of pursuing an anti-City agenda to weak London's standing as a financial centre. Boris Johnson, the Mayor of London, warned that the "proper desire to root out wrongdoing" should not become an excuse for "protectionism" and a "self-interested attack".



Standard Chartered shares rose 7pc in early trading in London on Wednesday, after plunged 16pc on Tuesday as analysts said it could lose 40pc of its earnings if US regulators are successful in securing money-laundering charges against the bank. Shares in the bank rose more than 2pc at one stage in Hong Kong earlier.



A spokesman for the Federal Reserve told Reuters it had been working closely with various prosecutorial offices on matters involving Iran and other sanctioned entities, but could not comment on ongoing investigations.