Senators doubtful as HSBC touts money-laundering fixes
By Carrick Mollenkamp
WASHINGTON (Reuters) - Officials of HSBC Holdings Plc pledged to a U.S. Senate panel on Tuesday that the bank is changing the way it polices illicit funds, but senators were skeptical the bank could deliver on promises it had broken before.
HSBC's top compliance officer announced he was stepping down and that the bank will shut down businesses in secret havens such as the Cayman Islands, but those offers did not blunt the senators' allegations that the bank sacrificed propriety for profits.
The hearing by the Senate Permanent Subcommittee on Investigations came a day after it released a 400-plus-page report detailing how the British bank acted as a financier to clients routing funds from the world's most dangerous corners, including Mexico, Iran and Syria.
While money laundering problems at HSBC have been flagged by regulators for nearly a decade, the criticism comes at a sensitive time for the banking industry.
Banks are facing accusations of greed tied to allegations that international banks for years tried to rig the global lending benchmark rate Libor and other scandals, including a trading bet gone awry at JPMorgan Chase & Co.
The hearing brought HSBC's own scandal squarely into the political spotlight.
Senator Carl Levin, who chairs the panel, read what he said was a 1993 statement from HSBC that asked its group members to comply with the letter and spirit of laws, and said it sounded similar to the commitments offered by HSBC on Tuesday.
"Do you agree, given past commitments have not been kept, that the bank has a heavy burden of proof that they mean what they say?" Levin asked one panel of witnesses consisting of HSBC's top legal officer and the head of HSBC's U.S. operations. Continued...