One HSBC executive told us that a major reason why HSBC opened its US bank was to provide its overseas clients with a gateway into the US financial system. Now, on top of that, HBUS’ history of weak anti-money laundering controls, and you’ve got a recipe for trouble.

        It’s not just money from the cartels of Mexico, the committee’s investigation found evidence to safeguards supposed to prevent transactions with world great regimes like Iran were bypassed. Services were provided to banks in Saudi Arabia and Bangladesh with links to terrorist financing. And millions of dollars in suspicious travelers cheques were clear for Japanese bank and a fitting Russian used car dealers. HSBC has said sorry and promised to do better. Senior figures are already paying the price.

        I recognize that there have been some significant areas of failure. I have said before and I will say again: despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators. As I have thought about the structural transformation of the bank’s compliance function, I recommended to the group that now is the appropriate time for me and for the bank for someone new to serve as the head of group compliance.

        Outgoing has also criticism of the regularities supposed to protect the financial system but it failed to take action.

        What these hearings were shown is how HSBC has consistently failed to tackle financial crime machines and how US regulators have consistently failed to get HSBC to what it escaped. What we need is we need serious regulation and in the worst cases, we need criminal prosecutions against those who get it wrong. 

        Suddenly, Washington is very interested in British banks elsewhere on Capitol Hill. The head of the Federal Reserve was grilled up what he knew and when about the Libor scandal. The search for answers has only just begun. It is not the end of the money laundering scandal for HSBC either. US Department of Justice has confirmed that it’s investigating which reported the fine will be as much as $1b.