HSBC Chairman Douglas Flint said the cost of policing potential wrongdoing will probably decrease after Europe’s largest bank by market value spent billions of dollars to toughen its internal controls in the wake of a series of scandals.
'It’s huge but it’s necessary,' Flint said in an interview on Bloomberg Television’s The Pulse with Jonathan Ferro from Salzburg, Austria, Tuesday, when asked about costs of boosting internal controls. 'As you look back, you might as well say it was necessary -- an investment that was underspent in the past and now there’s an element of catch-up and hopefully' we’ll be able 'to moderate that cost,' he added.
Bloomberg News reports that HSBC, fined $1.9 billion by U.S. authorities in 2012 to resolve allegations it enabled Latin American drug cartels to launder billions of dollars, has been beefing up its internal controls in the face of regulatory scrutiny. The London-based bank increased compliance staff to 6,000 from 1,500 over the past four years and is spending an additional annual cost of between $500 million to $1 billion, according to Flint.
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