Quasi-Criminal Competence of Central Bank in Response to Banking Violations: A Comparative Study of Central Bank Act of Iran and US Federal Banking Laws

Document Type : Research Paper

Authors

1 Assistant Prof., Department of Criminal and Criminology Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran

2 M. A. In Criminal and Criminology Law, Faculty of Law, Shahid Beheshti University,Tehran, Iran

Abstract

In recent decades, alongside the increasing complexity and specialization of issues on one the hand and the growing number of matters requiring government oversight and control on the other hand, the quasi-criminal jurisdiction of various regulatory bodies have expanded. One such area is the country's monetary and banking system, which has undergone significant changes with the enactment of the Central Bank of the Islamic Republic of Iran Law in 2023, introducing a novel approach called banking regulation.  This article employs a descriptive-analytical method, examining the new Central Bank Law on one hand and U.S. federal laws on the other, to normatively, procedurally, and structurally analyze the quasi-criminal jurisdiction of banking regulation in these two countries. The primary question of this research is what are the most significant similarities and differences between the banking regulatory systems in Iran and the United States. In this regard, the expansion of violations falling under the jurisdiction of the Disciplinary Board, along with addressing some criticisms of its structure and procedures, are among the most important aspects of Iran's recently enacted Central Bank Law. These are compared with the jurisdictions of U.S. banking regulators, particularly their formal enforcement actions. The findings of this study indicate that, in the U.S. legal system, the central concept in banking regulation is determining "unsafe and unsound" practices-a fluid concept whose specifics are clarified through practical enforcement. In terms of regulatory responses, U.S. regulators have broader authority, as their jurisdiction can extend to a wider range of individuals compared to their Iranian counterparts. Additionally, transparency in handling violations through public proceedings and faster processes are among the strengths of the U.S. banking regulatory system, which could serve as a model for policymakers and implementers in Iran's banking system.

Keywords

Main Subjects

References

  1. Books

    1. Elsan, Mostafa (2013). Hoghogh-e Bank-e Markazi. Tehran: Monetary and Banking Research Institute (In Persian).
    2. Jackson, H. E. & Symons E. (1999). Regulation of Financial Institutions, St Paul: West Group.
    3. Mishkin, Frederic (2020). Money, Banking and Financial Markets. Translated from English to Persian by H. Ghazavi. Tehran: Iran Banking Institute (In Persian).
    4. Saffari, Ali (2023). Penology. Tehran: Jungle publication (In Persian).

     

    • Articles
    1. Dela Cruz, R. & Villaluz, G. (2024). US banking regulators' severe enforcement action issuance hits 7-year high. S&P Global. https://www.spglobal.com
    2. Hartlapp, M. (2020). Measuring and comparing the regulatory welfare state: Social objectives in public procurement. The Annals of the American Academy of Political and Social Science, 691(1), 68-83. https://doi.org/10.1177/0002716220952060
    3. Malloy, M. P. (1988). Balancing Public Confidence and Confidentiality: Adjudication Practices and Procedures of the Federal Bank Regulatory Agencies. Temple L. Rev., (61), 723-797.
    4. Manzoor, Davood & Sayedhosseinzade Yazdi, Saeed (2020). Tanzimgari va Moghararatghozari-ye Nezam-e Mali dar Iran: Arzyabi-ye Moghayeseyi. Journal of Monetary & Banking Research, 13(43), 149-188 (In Persian).
    5. Minzner, M. (2011). Why Agencies Punish. & Mary L. Rev., (53), 853-917.
    6. Yavari, Asadolah (2015). From criminal Law to criminal matters. Journal of Legal Studies, 7(2), 221-258. doi: 22099/jls.2015.3218 (In Persian).
    7. Yavari, Asadollah (2014). An introduction to concept of legal regulation. Comparative Law Review, 5(2), 629-647. doi: 22059/jcl.2014.52958 (In Persian).
    8. Zarei, Mohamadhossein & Azizmohamadi, Fatemeh (2017). Tahavolat-e Tafkik-e Ghova Dar Partov-e Hokmrani-ye Tanzimi. Legal Research Quarterly, (79), 213-237. doi: 22034/jlr.2017.54394 (In Persian).

     

    • Reports & Documents
    1. Basel Committee on Banking Supervision (2014). 29 Core Principles for Effective Banking Supervision. Translated from English to Persian by H. Sedghi. Tehran: Central Bank of the Islamic Republic of Iran (In Persian).
    2. FDIC (2022). Formal and Informal Enforcement Actions Manual. Retrieved from: https://www.fdic.gov
    3. FDIC (2023). Consumer Compliance Examination Manual. Retrieved from: https://www.fdic.gov
    4. Federal Reserve (2024). Order of Assessment of Civil Money Penalty. Retrieved from: https://www.federalreserve.gov
    5. Islamic Parliament Resrearch Center (2016). Nezarat-e Moaser bar Bankha va Masale-ye Eghtedar-e Magham-e Nazer. Tehran: number 15187 (In Persian).
    6. Islamic Parliament Resrearch Center (2023). Asib Shenasi va Eslahat-e Pishnahadi darmorede Aeenname Ejraei-ye Tabsare 2 Made 44 Ghanoon Poli va Banki. Tehran: number 22018972 (In Persian).
    7. International Monetary Fund. (2015) financial sector assessment program, report on detailed assessment of observance of the Basel core principles for effective banking supervision, Washington, D.C.

     

    • Thesis
    1. Onyiliogwu, I. (2019). Do Enforcement Actions by US Federal Banking Regulators Against Banks for Unsound and Unsafe Banking Practices Deter Further and Future Wrongdoing? A Way Forward. Master's thesis, Loyola University Chicago, Chicago.
    2. Matani, Mohamadali (2019). Banking Affairs Regulatory Rights in Iranian and British Legal Systems. PhD's thesis, Shahid Beheshti University, Tehran (In Persian).
Comparative Law Review
Volume 16, Issue 2 - Serial Number 32
Autumn & Winter 2025
December 2025
Pages 525-547

Files

Share

How to cite

Statistics