The discourse this weekend over HSBC is whether the bank and those its Swiss subsidiary aided to evade tax should be prosecuted, like any other citizen. Or whether there should be a repeat of what happened last time HSBC was in major trouble: the bank paid a fine equivalent to a pittance in its turnover; executives not only got off but were promoted to higher service; and the PR guff promised that all was now aright.

It is worth recalling exactly what HSBC was found to be – and admitted – doing on that last occasion, in 2012: laundering hundreds of millions of dollars for the world’s biggest crime syndicate, the Sinaloa narco cartel of recently arrested “Chapo” Guzman.

Mexico’s narco nightmare now counts 100,000 dead and some 20,000 missing; there is no overstating the misery of its export – hard drugs – around the world. Yet only one stepping stone connects HSBC to this carnage and misery: the bank acted as the cartel’s financial services wing.

Much of the money swilling into HSBC from the cartel came through an apparently small exchange house, Casa de Cambio Puebla. The bank would later protest that it knew not whence the money came, but Puebla had been under investigation by Mexican and US Federal authorities for two years when HSBC was caught, for handling a staggering $376bn of suspect money for an American bank, Wachovia. Wachovia was punished with a “deferred prosecution” – a yellow card; none of its employees was arrested.

HSBC carried on, however, through the same exchange house and other channels: a bank it had bought in Mexico, another in California and, it emerged, even through its own branches. When HSBC was caught out, the head of the US Justice Department’s criminal division, Lanny Breuer, said that cartel operatives would arrive at the bank’s branches and “deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows”. HSBC asked no questions.

It was Breuer’s task to weigh up the case on the basis of a Senate report into HSBC’s shifting of Sinaloa money. It ended up at the Justice Department, where Breuer concluded that HSBC had been guilty of “stunning failures of oversight – and worse, that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and to facilitate hundreds of millions more in transactions with sanctioned countries”, including money banked for terrorist organisations in the Middle East.

The bank was fined more than Wachovia, a record $1.9bn. But this was less than five weeks’ income for HSBC’s American subsidiary. Breuer deemed that HSBC should not be prosecuted in the way that a back-street dope-dealer would be; there would be a five-year “deferred prosecution”.

The bank announced that it would “partially defer bonus compensation for its most senior officials during the five-year period of the deferred prosecution agreement” – ergo they’d be renumerated with slightly less than usual. Ouch! But what HSBC did was not indictable.

And not just that: Paul Thurston, the man in charge of HSBC Mexico for some of the relevant period, was promoted to become head of global retail on a multi-million dollar salary. Stephen Green, the chief executive of the bank throughout its service to Chapo Guzman’s cartel, was appointed to the British government.

Green’s replacement as CEO, Stuart Gulliver, did what behemoth corporations always do in these situations: make a hollow statement to apologise for “past mistakes”. He said: “We accept responsibility for our past mistakes. We have said we are profoundly sorry for them.” He insisted HSBC was “a fundamentally different organisation” now. The bank said similar last week.

The reaction in Britain’s financial media was astonishing: to side with the bank against treacherous Mexicans manipulating its good name: “Mexico,” reported the Financial Times, “had become a compliance nightmare for HSBC.” The New York Times not only got the idea, but articulated it clearly:“Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.”

Referring to the Wachovia case, Robert Mazur, the US federal agent who infiltrated the BCCI bank, which was prosecuted for laundering money for Colombian drug lord Pablo Escobar, said something similar: “There were external circumstances that worked to Wachovia’s benefit, not least that the US banking system was on the edge of collapse.” Nevertheless, Mazur added cogently to this weekend’s deliberations: “The only thing that will get the message to the banks and start to solve the problem is the rattle of handcuffs in the boardroom.”

HSBC’s handling of Chapo Guzman’s blood money had no impact on the bank: the last letters you see on the ramp boarding a plane from London to Mexico City are HSBC, and they are the first on the arrivals ramp when you get there, near a hangar recently revealed to belong to the Sinaloa cartel. Now, for the bank to get off with a wag of the finger for its disdain for those of us who pay our taxes would be a scandalous affirmation that we no longer understand any difference between crime and legality. • Comments will be opened later today