HSBC, which last year paid $1.92 billion to settle charges it breached anti-money laundering rules in the US, has appointed former US deputy attorney general James Comey, while also setting up a new "financial system vulnerabilities committee", the banking group said today.

Comey takes up the role from March 4 this year and will sit on the newly-formed committee, the UK/Hong Kong-listed banking group said in a statement.

Although today's statement made no explicit reference to the AML fine, the developments mean HSBC has become the second major bank in recent months to sign up a senior establishment figure to help improve governance. In December last year, Barclays brought in a former top UK regulator, Hector Sants, to the newly-formed role of head of compliance and government and regulatory relations. Also in December, HSBC agreed to make a total payment of $1.92 billion to settle a US criminal investigation over breaches of anti-money laundering and sanctions laws. This was said to be the biggest penalty ever paid by a bank for such transgressions.

The AML transgressions added to the scandal of LIBOR fiddling - for which Barclays and UBS have been heavily fined - that have rocked the financial system in recent years, prompting moves to tighten compliance.

“We have established this committee to provide governance, oversight and policy advice and to support the work which Stuart Gulliver, the group chief executive, is leading to simplify business activities and enhance risk management and control through enforcing and adopting the highest behavioral and compliance standards across HSBC,” Douglas Flint, group chairman of HSBC, said in a statement.

The new committee will comprise at least two non-executive directors and be supported by five subject matter experts as advisors. Comey’s appointment will be for an initial three-year term. He will be paid a director’s fee of £95,000 per annum (around $128,700), plus a fee of £30,000 per annum as a member of the financial system vulnerabilities committee. Alongside Comey, the other non-executive committee members are Rona Fairhead (chairman), chairman of the group risk committee, and Sir Simon Robertson, deputy chairman and senior independent director.

The expert advisors are Bill Hughes, a former head of the UK’s Serious Organised Crime Agency; the Honourable Juan Zarate, a senior advisor at the Center for Strategic and International Studies, who served as the deputy assistant to the US president and deputy national security advisor for combating terrorism from 2005 to 2009, and was responsible for developing and implementing the US government’s counterterrorism strategy and policies related to transnational security threats. 

Other members are Nick Fishwick, a former senior official in the Foreign and Commonwealth Office, specializing in security and counter-terrorism who was seconded from 2001 to 2004 to HM Customs and Excise as head of intelligence (law enforcement); Dave Hartnett, a former permanent secretary for tax at HMRC; and Leonard Schrank, former chief executive of SWIFT, the Brussels-based industry-owned global financial messaging system.

"The committee will provide governance, oversight and policy guidance over HSBC’s framework of controls and procedures designed to identify areas where HSBC and the financial system more broadly may become exposed to financial crime or system abuse," said Stuart Gulliver, HSBC's chief executive.