There is no such thing as easy money

In a ground-breaking penalty, HSBC has confirmed it is to pay US authorities $1.9 billion (Dh6.98 billion) in fines in a settlement over money laundering.

The agreement is the largest-ever imposed on a bank and underscores the extent to which the British-based lender helped launder money from drug cartels in Latin America. The settlement also covers HSBC’s activities in helping nations such as Iran — hit by financial and economic sanctions — circumvent measures meant to be punitive when imposed for failing to adhere to normal standards of international dialogue and processes.

“We accept responsibility for our past mistakes,” said HSBC group chief executive Stuart Gulliver in detailing the bank’s settlement.“We have said we are profoundly sorry for them and we do so again.”

Let’s hope Gulliver is true to his words.

However, those in other banks should take notice that they can no longer act with impunity or turn a blind eye to transactions and movements of funds between customers and accounts whenever large sums of cash are involved.

Throughout history, banks have hidden behind the cloak of privacy. Whether funds are skimmed by presidents, stolen by dictators, derived from drug addicts by cocaine dealers or moved by carpetbaggers for profit at the expense of international law, those practices are no longer tolerated.

In the past four years, the international banking community has failed to respond adequately to high debt levels, poor regulation and jumped at the opportunity to make quick profits while businesses, homeowners and borrowers struggled to make their next payments. There is a moral obligation upon those who look after our money to ensure that they act at all times beyond reproach, that they are circumspect in their dealings when need be and that the financial excesses of criminals and despots do not consume the bottom lines of banks.

Let this settlement be a warning that there is no such thing as easy money. And there is a price to pay for turning a blind eye.