European financial institutions face stiffer regulation in the aftermath of the recent scandal involving allegations that British banking institution HSBC Holdings handled accounts for tax evaders and criminals. According to Wharton accounting professor Jennifer Blouin , the HSBC case sends warning signals to the U.S. financial services industry as well. , and what are they doing?” she asked. “Who is facilitating black market criminal activity?” William K. Black , a professor of economics and law at the University of Missouri-Kansas City noted that “there is hope” for regulators to clean up the banking industry. He cited the concept of “Gresham’s Dynamic,” which economist and Nobel laureate George Akerloff propounded in a 1970 paper. “The concept is that when you gain a competitive advantage by cheating, then markets will become perverse and bad ethics will drive good ethics out of the marketplace,” he said. “We can block those dynamics. That’s what our function is as competent regulators.…