HSBC’s money-laundering enforcement case

What happens when prosecuting a major bank is considered dangerous enough to threaten the wider financial system? That question came up in the HSBC money laundering case, where U.S. authorities had been investigating allegations that the bank allowed millions of dollars to be laundered by terrorists and drug dealers.

Instead of criminal charges, HSBC agreed to pay a record $1.92 billion settlement, while senior British officials reportedly intervened behind the scenes. Then UK Chancellor George Osborne and the country's banking regulator warned that prosecuting Britain's largest bank could trigger what they described as a "global financial disaster."

A House Financial Services Committee report later said those British interventions played a significant role in persuading the U.S. Department of Justice not to prosecute. The case left a striking question behind: when a financial institution becomes large enough that prosecuting it is viewed as a threat to the financial system itself, where does accountability actually begin and end?