HSBC sets aside $1.8 billion for forex probe, misconduct

HSBC's (HSBA.L) profits fell short of expectations in the third quarter after the bank set aside $1.8 billion (1.13 billion British pounds) for misconduct settlements and compensation for customers, including a potential fine for rigging currency markets. The provision and a jump in HSBC's everyday compliance costs show the impact of regulators' increasing efforts to clamp down on bad behaviour in the global banking industry that contributed to the financial crisis. HSBC said on Monday it had spent $700 million more this year on compliance and risk than a year ago, and that level of expense looked set to stay, meaning it would miss one of its main cost targets. "The cost base of a global bank like ourselves is higher than it was before, because ... it includes a significantly higher compliance and regulatory cost than historically the banks had invested in," Chief Executive Stuart Gulliver said.

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