FSA tells HSBC to tighten its laundering rules

By MARTIN FLANAGAN
Published on 12/12/2012 00:00

BRITAIN’S financial regulator yesterday insisted on a tightening up of money-laundering compliance at HSBC after the bank confirmed that it had struck a $1.9 billion (£1.2bn) settlement with the US department of justice.

The Financial Services Authority said it was ordering the bank to set up a specific board committee “to oversee matters relating to anti-money laundering, sanctions, terrorist financing and proliferation financing”.

The FSA said it was also requiring HSBC to appoint a group money laundering reporting officer to ensure adequate systems and controls were in place, and to employ an independent monitor to oversee compliance and report to both the board committee and regulators.

It came as the department of justice filed documents in a federal court in Brooklyn charging the British bank with violating sanctions laws by doing business with Burma, Cuba, Iran, Libya and Sudan.

Keith Bowman, banking analyst with Hargreaves Lansdown, said: “HSBC is anxious to draw a line under the affair. Positively for shareholders, the fine has already been largely accounted for, with the figure seen as more than bearable given the bank’s size and strength.” HSBC’s shares closed up 3.6p at 644.8p.

Stuart Gulliver, HSBC’s chief executive, said in the bank’s statement: “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again.”