Wednesday, December 12, 2012

HSBC Fined $1.9 Billion For Money Laundering

This article (via Manan Shukla) describes the money laundering charges against Britain's largest bank.  This fine is on top of another fine that HSBC and other banks paid for manipulating the interest rate that banks charge each other for short term borrowing. 

Money laundering is a felony.  If the US Justice Department successfully prosecuted HSBC on money laundering it would have been prevented from operating its business in the US and it would have had more difficulty borrowing money because many pension funds are not permitted to lend money to banks that have committed a felony.  HSBC is also large enough to be a systemic risk to the global financial system.  Consequently, the US Justice Department accepted a less plea from the bank.

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