BANKING giant HSBC plans to “acknowledge and apologise” for failing to spot and deal with money laundering within the bank during a US Senate panel hearing next week, according to an internal memo sent by its chief executive.
“It is right that we are held accountable and that we take responsibility for fixing what went wrong,” chief executive officer Stuart Gulliver said in the note sent to staff.
In the note, Gulliver admitted that the bank’s anti-money laundering controls – meant to prevent terrorists and other criminals using its services – should have been stronger.
“We failed to spot and deal with unacceptable behaviour,” Gulliver told staff.
Gulliver’s mea culpa marks another dark day for banks, coming just over a week after Barclays chief executive Bob Diamond was forced to resign over its role in fixing the Libor rate at which banks lend to one another.
The US Senate Permanent Subcommittee on Investigations has been investigating HSBC for months as part of an effort by Congress to probe shadowy money flows.
Last month ING, the Dutch bank, paid $619m to settle accusations it helped Iranian and Cuban companies move billions of dollars through the US financial system in violation of US sanctions.
Some analysts have suggested HSBC’s fine could be far higher – potentially as large as $1bn.
HSBC is also under investigation by the US Securities and Exchange Commission and the Justice Department. Those probes are examining whether HSBC was vulnerable to illicit funds moving through the bank.