US senators have accused the global bank HSBC of opening the doors of the financial system to terrorists, drug dealers and money launderers.
Senators found the London-based lender allowed affiliates in countries such as Mexico, Saudi Arabia and Bangladesh to move billions of dollars in suspect funds into the United States without adequate controls.
At a time when the banking sector is already under fire for manipulating interest rates and the reckless trades that led to the 2008 financial crisis, HSBC moved quickly to apologise and promise to improve its procedures.
"In an age of international terrorism, drug violence in our streets ... and organised crime, stopping illicit money flows that support those atrocities is a national security imperative," Senator Carl Levin said.
"HSBC used its US bank as a gateway into the US financial system for some HSBC affiliates around the world to provide US dollar services to clients while playing fast and loose with US banking rules," he said.
"If an international bank won't police its own affiliates to stop illicit money, the regulatory agencies should consider whether to revoke the charter of the US bank being used to aid and abet that illicit money," he warned.
HSBC said it would attend a Senate hearing today and promise to create a new simpler-to-manage global structure for its operations while doubling the budget of the compliance wing charged with applying anti-laundering rules.
"We will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect," HSBC said in a statement.
"We will apologise, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong," it added.
In future, all HSBC banks around the world would apply "a single standard globally determined by the highest regulatory standard we must apply anywhere".
Under the slogan "The World's Local Bank", the network that began life as the Hong Kong and Shanghai Banking Corporation provides US dollars to HSBC banks in many countries under a procedure known as "correspondent banking".
According to the US Senate's Permanent Subcommittee on Investigations, the firm's US unit HBUS allowed partner HSBC banks in countries with weak fraud and laundering controls to move billions of dollars through its books.