Has America got it in for British banks? As a turbulent 2012 draws to a close, it is not surprising that some in the City believe America has turned British banks into the equivalent of an ATM machine. It is a feeling sharpened by the explosive language that US authorities use in the battle for the next day's headlines. In July, a congressional investigation accused HSBC of letting "drug kingpins and rogue nations" launder money. A month later, the Department of Financial Services, a New York regulator, claimed Standard Chartered was behind a "staggering cover-up" involving $250bn of illegal transactions. Mark Calabria, director of financial regulation at the Cato Institute, a think tank in Washington, says that the perception is understandable given the frequency and the size of the fines that have been levied since the summer. However, he adds that, despite the intense competition between London and New York to be the world's financial capital, US officials are not deliberately picking targets in the Square Mile. New York and London are the financial markets of the world. Everyone else is a bit player," argues Calabria. What that means is that if there are regulatory issues, it is likely to be with UK and US banks. What is also clear is that UK banks operating in the US face a more complicated and fragmented regulatory backdrop than they do in Britain, where the Bank of England is responsible for enforcing the rules. At a national level in America, the Securities and Exchange Commission, the Commodity Futures Trading Commission (CFTC), the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency all have responsibility for regulating banks. Financial institutions with operations in the world's biggest economy also need to contend with state regulators and, increasingly, the chief lawyers at a state level. For some in America, the country's regulators are at last beginning to do their jobs following lapses that helped to pave the way for the financial crisis. Having lambasted Wall Street when running for the White House in 2008, President Barack Obama still faces criticism that his administration has not done enough to toughen regulation and bring prosecutions. In response to that pressure, the Financial Fraud Enforcement Task, an agency first established in 2009, created a new group in January designed to go after banks that mis-sold mortgage-backed bonds in the run-up to the crisis. JP Morgan became the group's first target earlier this autumn. Indeed, there were questions on Tuesday about why authorities did not bring a criminal prosecution given the scale of lapses they alleged at HSBC. Lanny Breuer, a senior prosecutor at the Department of Justice, signalled it was because such a move could ultimately have resulted in job losses at the bank and other "collateral" damage at the bank. For others, new rules introduced since the crisis, combined with the small army of regulators, has left the biggest banks, including British ones, vulnerable. "The environment is extremely hostile to large banks," says Jerry Markham, a law professor at Florida International University and former prosecutor at the CFTC. The regulators know that they [the banks] are big, fat cows that can easily be shot. Wherever you stand on the politics of regulating banks, there is little doubt that UK banks badly underestimated the importance of complying with anti-money laundering rules in the US. Of the $3.4bn in fines and forfeitures extracted this year, just over $2.5bn stem from breaches of anti-money laundering rules which, since the September 11 terrorist attacks, have also been used in Washington as a critical tool in thwarting terrorists. Lloyds and Barclays were fined in 2009 and 2010 respectively for breaches of the anti-money laundering laws. "Foreign banks in general are surprised at the level of seriousness with which it is taken," says Ross Delton, an expert on anti-money laundering and former government prosecutor. US banks tend to hire compliance chiefs with experience on the government side. HSBC, for example, has hired two former senior US Treasury officials to run its legal and compliance departments. If British lenders are feeling bruised from their US experience this year, Sandy Chen, a banking analyst at Cenkos in London, points out that the UK banks face an £11bn bill from mis-selling payment protection insurance in Britain. He argues "that is the context" in which the US fines need to be set. But, with US regulators continuing to investigate Libor, as well as money laundering, Britain's banks may face more financial and reputational bruises in America next year.