[ by Howard Haykin ] Whenever U.S. Senators talk about HSBC's handling of money laundering transactions over the 10-year stretch - from 2001 through 2010 - they invariably mention the concurrent oversight failures by officials and personnel of the U.S. Office of the Comptroller of the Currency.  The actions or failures to take action by these regulators are tantamount to abetting crimes, violations, and actions against the United States of America - their employer. Over the past 2 days, the Senate U.S Senate Permanent Subcommittee on Investigations has held hearings, listening to testimony from HSBC executives and officials of the U.S. Office of the Comptroller that attempt to explain how and why the processing of money laundering transactions through HSBC and perhaps other financial institutions repeatedly took place over a 10-year period.

Don't miss our related story, posted in Wednesday's WHO'S News section - HSBC Top Compliance Official Resigns - about a most unexpected moment during this 2-day Senate hearing.

Senate Next Hear from the U.S. Office of the Comptroller of the Currency. In any case, the Senate subcommittee used HSBC as a "case study" for problems it said are widespread in the finance industry.  The case study is the subject of a very large report released by the subcommittee on Tuesday. In that report, it is said that HSBC's American regulator, the Office of the Comptroller of the Currency, had not adequately punished HSBC when it discovered problems at the bank. Thomas Curry, who became the Comptroller of the Currency in April, told the subcommittee that his agency was embracing the report's recommendations for changes at the agency, noting: "The agency has been much too slow in responding and addressing what are significant weaknesses and violations at this institution." Mr. Curry added that some of the examiners' conduct was troubling and reprehensible, and that in the future he wants the agency to be more nimble and take in the complete picture of the bank's operations. Senator Tom Coburn (R-OK), the committee's ranking Republican, asked Grace Dailey, a former large bank supervisor in the Comptroller's office, to sum up where the agency had failed.  She said examiners had done a lot of work but failed to step back and take prompt action. Not pleased, Mr. Coburn said that kind of answer means that the problems will persist. Comptroller Curry stepped in to assure the Senators that their concerns will be "thoroughly and fairly reviewed" and that proper action would be taken.  Senator Carl Levin then pushed for specifics, asking what happens when an examiner wants to take action against a bank but is prevented by a supervisor. Mr. Curry said, "They can appeal to me."  Whereupon, Mr. Levin predicted that Mr. Curry will be fielding calls from examiners in the coming months.  [Dealbook, 7/17/12]