STORY HIGHLIGHTS

Editor's note: Mark Calabria is director of Financial Regulation Studies at The Cato Institute. Lisa Gilbert is director of Public Citizen's Congress Watch division.

(CNN) -- A libertarian from The Cato Institute and a progressive from Public Citizen may not often agree on politics or what the proper role of government should be, but we agree the public has been kept in the dark on the "too big to jail" issue for too long.

Just over a year ago, many were stunned when the Department of Justice decided not to indict HSBC, headquartered in London an one of the world's largest banks. The Justice Department made this decision despite the fact that the bank willfully failed to comply with anti-money laundering laws.

HSBC's criminal activities seemed to most observers to provide a strong case for the government. These activities included permitting narcotics traffickers to launder hundreds of millions of dollars of drug proceeds through HBSC subsidiaries. It also facilitated hundreds of millions of dollars in transactions on behalf of customers in countries that are sanctioned by the United States: Cuba, Iran, Libya, Sudan and Myanmar (formerly known as Burma).

Mark Calabria

Lisa Gilbert

But instead of charging HSBC, the Justice Department entered into a deferred prosecution agreement. Under its terms, the government agreed not to prosecute the company for its actions in exchange for HSBC acknowledging wrongdoing, paying a fine and agreeing to cooperate with the government and remedy its compliance programs. The back's CEO issued a statement accepting responsibility and saying: "The HSBC of today is a fundamentally different organisation from the one that made those mistakes."

One can question the wisdom of our drug war and whether banks should be drafted into law enforcement duties, but those policy questions do not change a bank's duty to comply with the law.

In a Senate Judiciary Committee hearing after the settlement, U.S. Sen. Charles Grassley, R-Iowa, asked Attorney General Eric Holder why the government chose not to indict HSBC.

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Are banks too big to jail?