HSBC’s banking scam in Switzerland beggars belief. Except, perhaps more damningly, it doesn’t.
We are so used to banks saying they have learned the lessons of culpable behaviour, cleaned house, and drawn a line under scandals before a new one pops up that many people profess outrage, but in reality have become blase.
Banks no longer shock us with illegal and unethical behaviour. With good timing, the City’s financial watchdog yesterday told the House of Commons Treasury select committee that banks have been involved in a “staggering” number of scandals.
Martin Wheatley, chief executive of the Financial Conduct Authority (FCA), was telling MPs what they already know. Perhaps it was inevitable us punters in the stalls’ seats would becoming inured to the relentless wrong-doing and hollow breastbeating of the eight years since Northern Rock and Lehmans went to the wall, and Royal Bank of Scotland and Lloyds would have without state lifelines.
Libor rigging, forex rigging, mis-selling to individuals, mis-selling to businesses, money-laundering with both drug dealers and state-sponsored terrorism. Bring it on, a jaded palate might say, what else you got?
Well, HSBC has made an impressive attempt at lowering the ethical bar. Its secretive Swiss arm colluded in tax fraud (not tax avoidance, which is cleverly exploiting legal loopholes) with wealthy and criminal clients. Billions of pounds are involved.
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HSBC acquired its Swiss private bank through the acquisition of the Republic National Bank of New York and Safra Republic Holdings, a US private bank in 1999.
HSBC admits “standards of compliance” on an individual’s tax obligations were lower than they are now. And some. Now that the secret stashes have hit the fan, governments all around the globe, including the US, UK, France, Spain, Belgium, France and Switzerland itself, are on HSBC’s case.
Stephen Green, a minister of the cloth and former minister of the UK government, who was HSBC group’s boss when the Swiss cuckoo clock alarm didn’t go off, has said he will not comment as “a matter of principle”.
This one will run.
But, I believe many people are now punchy on the subject of banks’ misbehaviour, and we are more interested than astounded.