March 7 (Bloomberg) -- The U.S. Justice Department asked the Treasury Department about the economic impact of potential criminal charges against the HSBC Holdings Plc. when the bank was probed for money laundering, an official said today.
London-based HSBC agreed to pay $1.92 billion in December to close a global money-laundering case with the Justice Department and U.S. and U.K. banking regulators. The settlement included a deferred prosecution agreement with the U.S.
“The Justice Department contacted us, asked whether we could provide guidance on what the impact to the financial system may be of a criminal disposition in the HSBC case,” David Cohen, the Treasury’s undersecretary for terrorism and financial intelligence, said during a Senate Banking Committee hearing. “We were not in a position to offer any meaningful guidance.”
He was responding to a question from Elizabeth Warren, a Democrat from Massachusetts who asked Cohen and others testifying why the government doesn’t shut down banks that break the law.
U.S. Attorney General Eric Holder said yesterday that the size of the largest financial institutions has made it difficult to bring criminal charges when there’s wrongdoing. Criminal charges against a bank -- something that could threaten its existence -- may also endanger the national or global economies because of their size and interconnectedness, Holder said at a Senate Judiciary Committee hearing.
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