Trade minister breaks silence over money laundering scandal that took place while he was running the bank

The trade minister, Lord Green, has broken his silence over the HSBC money laundering scandal, saying he regretted the long-running incident that took place while he was running the bank. But he is still refusing to take questions on the controversy.

Labour has repeatedly called on Green to answer questions on what he knew about US Senate findings that HSBC laundered money for Mexican drug barons and possibly even terrorists.

On Tuesday the bank’s former chief executive and chairman conceded that he shared the “regret” expressed by the bank for the incident. The scandal is likely to result in a fine of at least $1bn (£650m).

But his refusal to turn up to the Lords – which is still sitting – did not satisfy Labour. The Opposition leader of the House of Lords, Lady Royall, called on Green to come to the house on Thursday to “dispel” the questions being posed about his ministerial role.

Green made his response in a letter to shadow Treasury minister Chris Leslie, in which he defended his track record at HSBC, where he spent 28 years, including becoming chief executive in 2003 and then chairman in 2006 before resigning to become trade minister at the end of 2010. He said HSBC had “expressed its regret that there were failures of implementation” with regards to anti-money laundering rules and those involving sanctions against countries such as Burma. “I share that regret,” Green said. He added: “As you know HSBC has also publicly committed to fixing what went wrong.

“It would not be appropriate for me to comment further on the specifics as this is a matter of continuing discussion between HSBC and the US authorities.”

He also said that the US Senate report showed that the senior management of the bank was “engaged with regulators” during the period.

In his letter to Leslie, Green said he was “proud” of his banking career. “HSBC have always sought to do the right thing, and when things go wrong worked hard to put them right. I have sought to embody these values in my own work to react appropriately to emerging issues both as CEO and chairman of HSBC,” Green said.

The level of the fine that HSBC will incur as a result of the litany of mistakes with regard to laundering money for drugs barons and breaching sanctions through its US operations between 2004 and 2010 is not yet known.

However analysts at Bank of America Merrill Lynch warn that estimates of a fine of $1bn may be too low on the basis that Dutch bank ING was fined $619m for funnelling $1.6bn of funds in breach of sanctions. The analysts point out that in the case of HSBC, some $19.4bn involved breaching sanctions just to Iran.

Green wrote to Labour ahead of what is regarded as crucial period for British business during the Olympics when the government is holding 17 summits with the aim of securing in at least £1bn of investment. The key session is on Thursday when Green is speaking at a major conference which is being sponsored by HSBC.

Lord Strathclyde, the leader of the Lords, had defended Green on Monday, saying that the trade minister did not have to be accountable to peers for his business career.