HSBC provided a conduit for "drug kingpins and rogue nations", according to a US Senate committee investigating money laundering claims at the bank. Its report said suspicious funds from countries including Mexico, Iran and Syria had passed through the bank.

The committee is hearing from HSBC officials, one of whom said he found it "painful and embarrassing" to talk about the bank's shortcomings. HSBC's head of group compliance, David Bagley, stepped down at the hearing.

Mr Bagley told the committee that the bank had "fallen short of our own and regulators' expectations but that a major overhaul of the bank's compliance activities was underway and that HSBC had "learned a lot of valuable lessons".

He said despite being head of compliance he had not had full authority to act over all parts of the bank.

The bank said it was in the process of closing 20,000 accounts in the Cayman Islands as a result of the investigation.

Senator Carl Levin said HSBC's lack of controls at its US and overseas units had been "a recipe for trouble". Mr Levin is chairman of the Senate Permanent Subcommittee on Investigations, which is looking into HSBC's activities between 2006 and 2010.

Its report also says that some HSBC bank affiliates got round US government rules prohibiting financial transactions with Iran and certain other countries, in some cases assisting terrorism.

We can blame them therefore for supporting terrorists and drug barons??