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Money laundering

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HSBC 'sorry' for aiding Mexican drugs lords, rogue states and terrorists. Executives with Europe's biggest bank, HSBC, were subjected to a humiliating onslaught from US senators on Tuesday over revelations that staff at its global subsidiaries laundered billions of dollars for drug cartels, terrorists and pariah states.

HSBC 'sorry' for aiding Mexican drugs lords, rogue states and terrorists

Lawmakers hammered the British-based bank over the scandal, demanding to know how and why its affiliates had exposed it to the proceeds of drug trafficking and terrorist financing in a "pervasively polluted" culture that persisted for years. A report compiled for the committee detailed how HSBC's subsidiaries transported billions of dollars of cash in armoured vehicles, cleared suspicious travellers' cheques worth billions, and allowed Mexican drug lords buy to planes with money laundered through Cayman Islands accounts.

Other subsidiaries moved money from Iran, Syria and other countries on US sanctions lists, and helped a Saudi bank linked to al-Qaida to shift money to the US. "Forget hindsight," said Levin. "No, senator," said Thurston. HSBC money-laundering scandal almost puts Barclays in shade. An alternative view of the great Libor scandal says it's a storm in a teacup and that everybody knew, or ought to have known, that banks will fiddle the rules when the game is refereed by their own ineffectual trade body.

HSBC money-laundering scandal almost puts Barclays in shade

This line is nonsense, of course, since we're talking about ugly deceit at the heart of financial system. Even so, the revelations about HSBC almost put Barclays in the shade. Being accused by a US Senate committee of operating a money-laundering conduit for "drug kingpins and rogue nations" is as bad as it gets. What happened to the HSBC of legend, the dull bank led by upright conservative types who ensured they employed only similarly good chaps? It seems that, in the period 2004-2010, HSBC's famous federation structure actually meant a management free-for-all. The numbers are extraordinary. To his credit, David Bagley, the head of group compliance in question, offered his resignation to the committee on Monday.

Everybody happy then? HSBC failed to act on money laundering, says US Senate. A hard-hitting US Senate investigation has concluded that HSBC, Europe's largest bank, ignored warning signs that its global operations were being used by money launderers and potential terrorists.

HSBC failed to act on money laundering, says US Senate

The findings of the investigation will be aired Tuesday in Washington when HSBC officials will be called to account for the actions. The Senate committee released a 340-page report prior to that meeting that catalogued lax controls at the bank's operations. HSBC's Mexican division comes in for particularly hard criticism. According to the report it continued to do business with "casas de cambio" – money-changing businesses – years after its rivals had stopped on fears that they were fronts for drug-cartel money laundering. The report says that the Mexico business had a branch in the Cayman Islands that in 2008 handled 50,000 client accounts and $2.1bn in holdings – but had no staff or offices.

The bank circumvented US sanctions on countries including Cuba and Iran, says the report. Trade minister Lord Green 'failed to halt flow of drugs cash' as HSBC boss. Trade minister Lord Green is under intense scrutiny after it emerged that HSBC continued to operate hundreds of accounts with suspected links to Mexican drug cartels, even after Green and fellow executives were told by regulators that HSBC was one of the worst banks for money laundering.

Trade minister Lord Green 'failed to halt flow of drugs cash' as HSBC boss

The revelations, contained in a US Senate report, raise further questions about Green's stewardship of the bank and come as he prepares to play an important role at the Olympics by using the Games to secure contracts for British business. Green, chief executive of HSBC between 2003 and 2006 and executive chairman from 2006 to 2010, has declined to comment on the report. Last night Labour shadow Treasury minister, Chris Leslie, wrote to Green, who is in the running to become the next governor of the Bank of England, demanding to know when he became aware of the problems raised in the report and the steps he took to remedy them.