You are here
HSBC says more clean up work to do after "terrible" list of problems
[LONDON] HSBC is more than halfway through a series of major reforms and still has more to do to guarantee the bank does not add to a "terrible list" of failures, its chairman said on Wednesday.
Europe's biggest bank has admitted failings in compliance and controls in its Swiss private bank after media reports said it helped wealthy customers conceal millions of dollars of assets in a period up to 2007.
This adds to a long list of banking scandals over past behaviour that have emerged since the financial crisis, including several at HSBC. The bank was fined US$1.9 billion two years ago by US authorities for lax controls that allowed criminals to launder money and was also hit with a US$611 million penalty by regulators in November for alleged manipulation of currency markets. "It's a terrible list," HSBC Chairman Douglas Flint said when a UK member of parliament read out the recent fines and investigations involving the bank at a panel hearing where Flint was being questioned.
The latest allegations around HSBC's Swiss bank have damaged its reputation and caused a political storm in Britain ahead of an election in May. The opposition Labour Party has criticised Prime Minister David Cameron for appointing former HSBC Chairman Stephen Green as a trade minister after he left the bank.
Flint and HSBC Chief Executive Stuart Gulliver apologised to the cross-party panel of UK politicians who oversee the financial industry for past failings at its Swiss private bank that allegedly allowed clients to dodge taxes. "It clearly was unacceptable, we very much regret this and it has damaged HSBC's reputation," Gulliver told the Treasury Committee in regard to practices at HSBC's Swiss bank in the mid-2000s. "I am responsible for clearing it up. I have made substantial changes," he said.
Gulliver told the lawmakers a Swiss account he held in the past was not to avoid tax, saying he had paid all his UK taxes and opened the account so colleagues could not see his finances.
Gulliver has come under fire after Britain's Guardian newspaper said he had sheltered millions of pounds in HSBC's Swiss private bank via a Panamanian company.