Record fines: 'New normal' for banking business?

LONDON. December 12. KAZINFORM In a historic fine, HSBC will pay out a record $1.92 billion to U.S. authorities to settle money laundering accusations -- activities which have allegedly occurred with drug cartels in Mexico and terror-linked groups in Saudi Arabia. U.S. authorities declaredHSBC, the UK's biggest bank by market capitalization, in breach of a series of U.S. laws, including the Trading with the Enemy Act, Kazinform has learnt from CNN.
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"We accept responsibility for our past mistakes. We have said we are profoundly sorry for them, and we do so again. The HSBC of today is a fundamentally different organization from the one that made those mistakes," HSBC Group CEO Stuart Gulliver, said in a statemen t.

On Monday, Standard Chartered , the UK's second largest bank by market value, agreed to pay $327 million to settle U.S. Treasury Department charges of violating sanctions on transactions with Iran, Burma, Libya and Sudan between 2001 and 2007. In AugustStandard Chartered  paid $340 million to the state of New York's Department of Financial Services to settle civil charges alleging it had concealed $250 billion in illegal transactions with Iran.

But while this week's fines are record fees, they are not earth-shattering when compared to the billions of dollars the banks boast in market values, assets and profits.

According to Quartz , it will take HSBC a mere 41 days to earn back the $1.9 billion fine.

 The Dirty Dozen: Biggest fines of the banking world since 2009

1. $1.9 billion, HSBC, December 2012. Charge: Accused of money laundering  activities tied to drug cartels in Mexico, terror-linked groups in Saudi Arabia.

2. $667 million, Standard Chartered, August and December 2012. Charge: Violating U.S. sanctions  on transactions with Iran, Burma, Libya and Sudan.

3. $619 million, ING Bank NV, June 2012. Charge: Covering up fund transfers  in violation of U.S. sanctions against Cuba, Iran.

4. $536 million, Credit Suisse, December 2009. Charge: Allowing clients in Iran , Libya, Sudan, Myanmar and Cuba to conduct financial transactions.

5. $470 million, Barclays, November 2012. Charge: Rigging electricity market .

6. $450 million, Barclays, June 2012. Charge: Manipulating bank Libor rates .

7. $350 million, Lloyds TSB Group. Charge: Allowing Iranian and Sudanese clients  access to the U.S. banking system.

8. $335 million, Bank of America, December 2011. Charge: Racial discrimination in lending rates .

9. $298 million, Barclays, August 2010. Charge: Allowing client payments from Cuba , Sudan.

10. $275 million, JPMorgan Chase, February 2012. Charge:Problems in mortgage servicing business.

11. $233 million, Royal Bank of Scotland, June 2012. Charge:Manipulating bank Libor rates .

12. $207 million, Ally Financial, February 2012. Charge: Problems in mortgage servicing business .

 

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