HSBC might face fines of around $1 billion by the US authorities and regulators for ineffective anti-money laundering controls, according to estimations in UK press.

The Financial Times said the flawed controls failed to ensure that the bank did not facilitate the financing of terrorism and other criminal activities.

The UK bank did not wish to comment on the potential $1 billion fine but said that it will testify before the Senate permanent subcommittee on investigations on 17 July.

"We will be discussing a number of compliance issues with members of the subcommittee, including past AML practices and in particular HSBC's remediation and resolution of compliance matters," the bank said in a statement.

Widespread media reports have cited an internal memo to staff ahead of the bank’s scheduled appearance in which Stuart ­Gulliver, chief executive, wrote: “Between 2004 and 2010, our anti-money laundering controls should have been stronger and more effective, and we failed to spot and deal with unacceptable behaviour.”

US prosecutors may take criminal or civil enforcement measures involving the bank amid an investigation into terrorist funding, HSBC said in February this year.

"The board and leadership of HSBC are fully committed to implementing the highest standards and have already made significant changes to our organisation’s structure to bring this about," the bank said.

HSBC is the second UK bank to be in the headlines for the wrong reasons in recent weeks, after Barclays was fined £290 million (around $448 million) by US and UK regulators for LIBOR rigging at the end of June. US politicians are now considering calling on Bob Diamond, the former Barclays chief executive who stepped down after the scandal broke out, to testify, according to media reports.

Regulators have continued to punish banks for offences relating to anti-money laundering. For example, in the UK, the Financial Services Authority, fined Switzerland's Habib Bank £525,000 and one of its former employees £17,500 for anti-money laundering system control failings. The regulator said in a statement that the shortcomings at the Swiss bank lasted almost three years and exposed the firm to unacceptable risk. Back in March, Coutts was fined £8.75 million for failing to take reasonable care to establish and maintain effective anti-money laundering systems and controls relating to high-risk customers, including “politically exposed persons.”