Two British banks will pay fines totalling nearly $2.5bn (£1.6bn) to United States regulators over money laundering and sanctions busting, it emerged today.
Reports out of Washington indicated HSBC is likely to pay $1.8bn to settle charges of lax money-laundering controls that allowed it to become a conduit for dirty money and sanctions busting.
A deal is expected to be finalised before Christmas, although it is understood that HSBC will in effect pay what it takes to draw a line under the affair.
Meanwhile Standard Chartered, which like HSBC is focused on numerous so-called "emerging markets", said it expected to pay a further $330m on top of $340m already levied by New York's department of financial services in August.
That followed the regulator's accusation that the bank had left the US "vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes" by covering up $250bn of transactions with Iran.
The charges were accompanied by a threat to withdraw Standard Chartered's permission to operate in New York, and initially saw its shares losing a fifth of their value, although they have since recovered.
The second payment will cover other regulators including the US Department of Justice. Its chief executive, Peter Sands, said the bank was in "active and constructive discussions" with American watchdogs, which he expected would "conclude very shortly".
The bank expects to pay $65m more to the UK Exchequer as a result of the Chancellor's decision to increase his banking levy, but is still hiring staff in Asia as its business there booms.
None the less, the huge amount of money the two banks will inject into US coffers has cast a pall over both of them and badly damaged their reputations.
Neither bank was in receipt of any bailout money from British taxpayers during the financial crisis.