HSBC escaped US money laundering charges amid financial disaster fears

HSBC escaped prosecution from US officials in 2012, after accusations of money laundering led to fears that the bank's failure could lead to a "global financial disaster", according to a report published on Monday.

The report, which was carried out by a Congressional committee in the US, said that UK Chancellor George Osborne contributed to pressure for HSBC to be let off.

The London-based multinational bank was accused of permitting drug cartels to use US banks to launder money. It paid a $1.92bn (£1.48bn) fine but did not face any criminal prosecution.

"George Osborne, Chancellor of the Exchequer, the UK's chief financial minister, intervened in the HSBC matter by sending a letter to Federal Reserve Chairman Ben Bernanke... to express the UK's concerns regarding US enforcement actions against British banks," the report said.

It continued that any criminal charges brought against HSBC would have "very serious implications for financial and economic stability, particularly in Europe and Asia".

Rather than following the case further, the Department of Justice in the US reached the settlement, a decision criticised by many.

"Rather than lacking adequate evidence to prove HSBC's criminal conduct, internal Treasury documents show that DOJ [Department of Justice] leadership declined to pursue [the] recommendation to prosecute HSBC because senior DOJ leaders were concerned that prosecuting the bank 'could result in a global financial disaster'," the report said.

Although the letter did not single out any particular official in the DOJ, it did imply that Attorney General at the time, Eric Holder, was reluctant to bring any charges to HSBC, due to its standing in the financial markets.