Standard Chartered Bank avoided a contentious Wednesday hearing that could have led to the revocation of their ability to do business in the state of New York, by reaching a settlement with the state Department of Financial Services for $340 million over widespread money laundering charges. This is a bit less than some of the rumors that came out yesterday about the negotiations, but it does include a monitor for New York to enforce compliance.

As part of the agreement, the bank agreed to install an on-site monitor for at least two years who will report directly to state officials. New York regulators will also place examiners at the bank. As a result of the accord, announced today by the state in an e-mailed release, the hearing that had been scheduled for tomorrow has been adjourned.

On Aug. 6, Benjamin Lawsky, head of the New York Department of Financial Services, or DFS, issued an order accusing Standard Chartered of helping Iran launder about $250 billion in violation of federal laws. One analyst estimated loss of the bank’s New York license could result in a 40 percent drop in earnings.

“The New York State Department of Financial Services and Standard Chartered Bank have reached an agreement to settle the matters raised in the DFS Order dated Aug. 6, 2012,” Lawsky said in the statement. “The parties have agreed that the conduct at issue involved transactions of at least $250 billion.”

A person familiar with the case said that Lawsky had sought as much as $700 million to settle the investigation. Julie Gibson, a spokeswoman for Standard Chartered, didn’t immediately return a call seeking comment on the settlement.

So Lawsky got about half as much as the initial offer. But when this initially came up, Standard Chartered denied that the transactions at issue were as high as $250 billion, which would have significantly lowered the final settlement cost.

In addition, this does not end the legal trouble for Standard Chartered. This only resolves the issues with the New York Department of Financial Services. Federal regulators (including Treasury, the Federal Reserve and the Justice Department) as well as the Manhattan District Attorney must now enter into their negotiations, and if they cannot get as much as the DFS, it will be completely embarrassing. This could cost Standard Chartered at least double this initial figure.

The good news is that New York’s Attorney General, Eric Schneiderman, while watching his counterpart at DFS force a much higher cost on Standard Chartered for their activities, did take action today on bath salts in Rockland County. Incidentally, if he wants to spend his term working on drug crimes, there are plenty of those on Wall Street as well!