HSBC executive quits over US money laundering report
The head of compliance at British banking giant HSBC has resigned in front of a US Senate subcommittee after it emerged the bank had exposed the US to billions of dollars worth of money laundering, drug trafficking, and terrorist financing.
David Bagley, who has been HSBC head of group compliance since 2002, stepped down before the Homeland Security and Governmental Affairs subcommittee after its findings were published.
Mr Bagley, who had a 20-year career with the bank and is based in London, said: "Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators."
Earlier in the hearing, subcommittee chairman Senator Carl Levin said HSBC's compliance culture had been "pervasively polluted for a long time".
The revelations are another blow to the reputation of the banking industry following the current scandal over the manipulation of the Libor inter-bank lending rate.
Foreign HSBC banks avoided safeguards designed to block transactions involving terrorists, drug lords, and rogue regimes, the subcommittee said, while it also ignored links to terrorists, providing services to risky banks in Saudi Arabia and Bangladesh.