Between HSBC's record $1.9bn fine today and Standard Chartered's $327m penalty the day before, it has been a week of hard lessons for Britain's banks. Or has it?
The charges are egregious indeed. HSBC's US operation allegedly helped launder money for Mexican drugs cartels and rogue states including North Korea. And Standard Chartered is accused of illegally processing up to $250bn of Iranian money through its New York arm.
The fines are not as punishing as they seem, however. Although they are the highest the US has ever levied for money-laundering or sanctions-busting, they are still chicken feed in comparison with the banks' respective revenues.
Then there is the question of responsibility. Peter Sands, the chief executive at Standard Chartered, is still in his job, as is Richard Meddings, the finance director. Indeed, none of the bank's senior executives has been forced out over the affair.
Similarly, the only senior resignation at HSBC has been that of David Bagley, the head of group compliance who dramatically handed in his notice at a US Senate committee hearing in July. Apologists point out that there has been so much boardroom upheaval since HSBC's laundering activities were taking place – between 2006 and 2009 – that no relevant senior management remain. And Stuart Gulliver, who took over the top job in 2010, is busy presenting himself as a much-needed new broom and receiving plaudits for it.
It is hard to believe, though, that no one with any responsibility for the bank's law-breaking remains. Furthermore, questions must surely still be asked of those who have left – not least Lord Green, who was chief executive from 2003 to 2006, executive chairman until 2010, and is now a Trade minister for the Coalition.
In any other industry, allegations of illegal practices on such a scale would be catastrophic – bosses would resign, criminal charges would be levelled, companies might even go out of business. Not so, it would appear, in banking.Reuse content