This week, HSBC's Swiss-based private-banking subsidiary made headlines for helping wealthy clients evade millions in taxes. The exposé came from whistleblower Hervé Falciani, who obtained the incriminating data from HSBC back in 2008.
The International Consortium of Investigative Journalists (ICIJ) has now published
detailed coverage of Falciani's findings. As confidence in global banking takes yet another knock, we assess the media's reactions.
$1.9bn
The total that HSBC Holdings PLC and HSBC Bank USA paid in fines under a deferred-prosecution agreement with a US court in 2012
What's new?
Jasper Sky of Deutsche Welle was not surprised by the latest banking scandal. "The pertinent question isn't whether one or two big banks have routinely engaged in criminal practices as a core element of their business models," he writes for the German international broadcaster. "The question is whether there are any that haven't."
HSBC responded to ICIJ's findings with claims that compliance culture and due diligence standards have significantly improved since the tax evasions took place - but Sky struggles to find evidence of this. "HSBC Holdings PLC, the corporate parent, and HSBC Bank USA paid $1.9bn in fines under a deferred-prosecution agreement with a US court in 2012," he points out. These fines allowed HSBC to avoid criminal prosecution for helping Latin American drug cartels launder $881m, he adds.
But Sky also notes that HSBC isn't "a lone rogue on the stage of global banking". With thousands of deals done behind closed doors every day, he asks how regulatory agency workers can really be expected to fully implement regulations.
dw.de opinion
Company culpability
Rather than highlighting problems within the wider banking sector, Alex Brummer, City Editor of the
Daily Mail, focuses on those at fault within HSBC - and the Conservative Party.
"Much of what has gone wrong at HSBC can be blamed on the ancien régime," he writes. It is possible that Lord Green was so focused on "cleaning up the sub-prime mess in the US that he paid insufficient attention to events at the HSBC's private bank in Switzerland," he argues.
But it's also clear that neither Bond (previous Chairman at HSBC when Green was CEO) nor Green could have tackled the issue alone, he adds. "A shifting group on the HSBC board, including the current Chairman Douglas Flint, could perhaps have resisted some of these disastrous deals that have besmirched the name of one the great franchises in banking."
For Brummer, in light of May's general election, the leak could also have significant political consequences. "The bungled appointment of Stephen Green, together with the undesirable tax status of some of the Tory donors, is an open goal for Labour."
thisismoney.co.uk comment "We have a regulatory system whose bark is louder than its bite"
Regulatory responsibility
Others feel that HM Revenue and Customs (HMRC) and the Financial Conduct Authority (FCA) are ultimately accountable. In a blog for the Move Your Money campaign, Fionn Travers-Smith deems the regulators' failure to take enforcement action "an outrage".
"This latest scandal strips bare the error of judgment made by US and UK regulators not to cancel HSBC's banking licence for Mexican money-laundering offences in 2012, as well as undermining HMRC's own claims to be 'closing in on tax avoiders'," Travers-Smith claims.
He believes that while other countries take action, the UK remains bound by too-big-to-fail banks. "To our shame, we have a regulatory system whose bark is louder than its bite," he argues. "In the absence of criminal prosecution, why should the public hold any faith that regulators hold the banks to account, and not the other way round?"
moveyourmoney.org blog
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