HSBC regrets

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The FT, Guardian and others note that HSBC was full of regret at its results announcement yesterday.

As the Guardian put it:

The chairman of HSBC warned yesterday that fear of hefty fines was forcing banks to become risk averse as they grapple with unprecedented regulatory reforms in the wake of the financial crisis.

In fact, he so regrets this burden that he has written to anyone he hopes might listen to ask that the splitting of banks, designed to protect us against a future crash, be delayed from its already absurdly late proposed date in 2018. If not we may suffer as he puts it, and as is quoted in the FT, suffer:

an observable and growing danger of disproportionate risk aversion creeping into decision-making in our businesses as individuals, facing uncertainty as to what may be criticised with hindsight and perceiving a zero tolerance of error, seek to protect themselves and the firm from future censure.

If a few more people checked bank statements it might help his organisation, but despite the fact that they apparently can't get such basics right he stills wants less regulation. What for, you might ask? Well the FT notes his lament relating to:

the lack of innovation in wealth management products because of the risk of mis-selling allegations.

Now let's just consider that issue alone for a moment. What Douglas Flint appears to be saying is that he regrets the chance to sell customers insurance they did not need and could not claim on. And he regrets having to send them proper statements that remind them they can repay the bank if they so wish. Perhaps he also regrets not being able to sell so much tax abuse. Perhaps he regrets the fact that HSBC's Swiss private bank can no longer hide tax evasion. Perhaps he regrets the fact HSBC can no longer money launder for drug barons in the Caribbean. Is that the sort of innovation in wealth management products he regrets no longer being available?

Whilst the rest of us would just like a bank who can get basic banking right banks have no such aspiration. That means that there is an appropriate regret with regard to the likes of HSBC, which is that more has not been done to break them up to protect us all from what they do. But bankers have a very different regret. They regret that it's no longer the spring of 2007 and hanker for it still. Which is why everyone else needs to be very vigilant indeed.