Standard Chartered has sought advice about whether it can pursue a legal action against the US regulator that on Monday accused the British bank of being a rogue institution which had funded $250bn of Iranian sanctions breaches.

The bank’s legal advisers believe “there is a case” for reputational damage, according to two people close to the situation, although StanChart is conscious of the delicacy of taking an aggressive stance towards its regulators.

In an interview with the Financial Times, his first since the dispute with the New York state’s Department of Financial Services blew up on Monday, Peter Sands, chief executive, refused to comment on the suggestion of legal redress. But he made no secret of his irritation at the damage done to StanChart. “Our reputation has been damaged,” Mr Sands said. “It’s not worth pretending that isn’t the case.”