Police and financial regulators are examining claims that Britain’s biggest high street banks were involved in a multibillion-dollar Russian money laundering scheme that threatens to engulf the City in a new scandal.

The National Crime Agency and the Financial Conduct Authority have been drawn into the growing political furore after UK lenders, including HSBC, Barclays and Royal Bank of Scotland, were accused of handling more than $700 million in laundered money for a Russian criminal gang.

Senior executives have to be held accountable when their banks break the rules

The banks involved have denied any wrongdoing, saying that they comply with all relevant laws and have systems in place to combat financial crime.

Last night it was alleged that Deutsche Bank, whose clients include President Trump, had played a prominent role in the scandal, acting as a “correspondent bank” for dirty money. The lender said that it had significantly strengthened its systems and controls.

Speaking in the Commons yesterday, John McDonnell, the shadow chancellor, raised an urgent question on the issue, saying that the allegations would amount to “overwhelming failure of management” if proven.

“Money laundering through London threatens the financial stability of our economy,” said Mr McDonnell.

Simon Kirby, economic secretary to the Treasury, confirmed that the FCA and NCA were in the early stages of investigating the claims.

It was alleged on Monday that HSBC had processed $545 million of criminal funds, according to documents passed to The Guardian by the Organised Crime and Corruption Reporting Project (OCCRP), a US government-backed programme.

The OCCRP dubbed the Russian money laundering scheme “the Global Laundromat”, claiming that $20 billion was moved out of Russia illegally between 2010 and 2014. Global Witness, the anti-corruption campaign group, urged a full investigation. “Senior executives have to be held personally accountable when their banks break the rules,” said Murray Worthy, a senior campaigner with the group.

In 2012 HSBC paid a $1.9 billion settlement with the US authorities over money laundering charges and was obliged to hire an independent monitor to oversee its clean-up efforts; a system that remains in force.

The recent allegations against HSBC centred on its Hong Kong branch. Banking insiders have warned that Russians are attracted by the Chinese territory’s dollar peg, a mechanism that effectively allows them to buy dollars without having to put their funds through the US financial system.

On Monday, HSBC said it was “committed to fighting financial crime,” and it had “systems and processes in place to identify suspicious activity and report it to the appropriate government authorities.” Barclays and RBS said yesterday that they complied with all relevant rules and regulations, and had systems and procedures in place to counter money laundering. Barclays added that it worked with law enforcement to fight financial crime.