HSBC to Apologize at Senate Hearing HSBC, Europe's largest bank, will apologize to American authorities next week for failing to prevent potential money laundering activities from taking place at the bank, according to an internal memo obtained by DealBook. Lawmakers in Washington and London are stepping up their investigations into activities at leading financial institutions. Another British bank, Barclays, agreed to a $450 million settlement with the American and British authorities last month over its manipulation of a key interest rate. Senior executives from HSBC will testify before a Senate subcommittee on Tuesday. The questioning will focus what went wrong with the compliance efforts inside the bank that failed to defect potential money laundering activities. The American authorities have been investigating activity inside the bank that took place from 2004 to 2010. "We will acknowledge and apologize for our past mistakes," Stuart Gulliver wrote to employees in a memo, whose contents were confirmed by an HSBC spokesman. Our anti-money laundering controls should have been stronger and more effective, and we failed to spot and deal with unacceptable behavior. During the testimony, bank officials will also explain the steps that HSBC has taken to improve its internal risk management, Mr. Gulliver said. The bank had doubled its compliance budget to $400 million in the past two years. Mr. Gulliver is not expected to testify at the Senate hearing. "It is right that we be held accountable and that we take responsibility for fixing what went wrong," Mr. Gulliver said in the memo. The announcement is the latest black mark against the British banking industry, which has been hit by a number of scandals in recent months. Along with the Barclays settlement connected to the London interbank offered rate, or Libor, JPMorgan Chase also disclosed in May that executives in London had made complex trades that exposed the bank to financial risk. The losses connected to the activity could reach up to $9 billion, far exceeding earlier public estimates. In response to a growing public outcry about the banking industry, the British government has announced a review into its transparency, conflicts of interests and professional standards. British lawmakers have also begun a separate inquiry into the specific workings of Libor, which is used as a benchmark for around $350 trillion of financial products worldwide. Both reviews are expected to be completed by the end of the year.