What price AML now?

Timon Molloy, Editor (timon.molloy@informa.com)

‘Too big to fail and too big to jail’ is the mainstream verdict on the US$1.9bn charge HSBC will bear for systematically flouting US Bank Secrecy Act /Anti-Money Laundering and sanctions laws between 2006 and 2010. [1] The sizeable penalty certainly pales against the bank’s 2011 profit before tax of US$22bn and then there’s the small matter of who picks up the bill: shareholders in the first instance but will the customers escape recouping through higher fees? So, 9% of one year’s turnover for all that business lucratively transacted over years with some really, really bad people [2] and all those bankers’ bonuses paid along the way: in hindsight, it looks like a commercially sound strategy. There is of course the reputational risk, but that’s so intangible; at least, the share price has barely missed a beat (see chart)