HSBC Exec Quits in Front of Senate Panel

Six people with top jobs at HSBC went before a Senate panel yesterday to answer charges of money laundering—and five left with those jobs intact. David Bagley, the British banking giant's head of compliance since 2002, announced his resignation in front of lawmakers, BusinessWeek reports. "I recognize that there have been some significant areas of failure," he told the hearing. "HSBC has fallen short of our own expectations, and the expectations of our regulators." Another HSBC exec pledged to close down its Mexican unit's US dollar accounts in the Caymans.

The Senate's probe found that laxness on the part of HSBC and regulators allowed funds from terror groups, drug lords, and Iran to enter the US financial system. "The problem here is that some international banks abuse their US access," Sen. Carl Levin said at the start of the hearing. "The end result is that the US affiliate can become a sinkhole of risk for an entire network of bank affiliates and their clients around the world playing fast and loose with US rules." The bank now faces up to $1 billion in penalties. (More HSBC stories.)