A US Senate report has said lax rules at HSBC allowed Europe's largest bank to serve Mexican cartels as a conduit for money laundering, helped firms skirt sanctions on Iran and opened the US financial system to entities linked to terrorism.
The report, which was released on Monday, said drug traffickers had used the bank's affiliates in Mexico to transfer huge sums of money to the United States.
On Tuesday, HSBC officials and US federal regulators are to testify to a Senate sub-committee hearing on the report, which comes at a rough time for the banking industry.
The report also said that affiliates of HSBC may have concealed references to Iran in transactions to circumvent US sanctions.
"We will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect," HSBC said in an online statement.
"We believe that this case history will provide important lessons for the whole industry in seeking to prevent illicit actors entering the global financial system," it added.
Another Britain-based bank, Barclays, has come under recent scrutiny over a rate-rigging scandal.
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