The following report has appeared in the press:
I should add that the report was in the Mail in May 2012.
There are three things to note.
Firstly, that this review is done every three years. One is due now. It's not news.
Second, as was said then, there was (and is) no rational reason to leave.
Third, nothing has changed since then bar the Conservative threat to leave the EU.
So, if HSBC is thinking of leaving now it would be irrational, and a reaction to irrational Tory policy.
You know who to blame.
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as a recent Guardian article points out, the American’s won’t take them after the money laundering scandal and if they go back to Hong Kong they risk being under the thumb of the Chinese.
personally i’d love to see them leave along with every other corrupt, too-big-to-fail financial coorporation. it might cost us a lot of tax revenue in the short-term but in the medium to long-term the pound might drop in value enough to allow the rest of us to go back to making things for a living. and we’d no longer be liable for their massive debts. and we’d no longer be responsible for them draining money out of the rest of the world like the blood sucking, disease-inducing parasites they are.
I might be cynical I might be mistaken.
One thing has definitely happened and changed.
The CEO has worked most of his life in HKG. Its a nice place I don’t blame him. He is now a non dom in the UK has been for some time. He intends, he has told us, to live his old age or at least return to HKG. He intends to die there, in HKG.
He got told off, shouted at, laughed at by some MPs. THe labour party are removing his non dom status.
This time the move possibility might be serious. I can see why even at some expense two fingers up might be his approach.
So now Europe’s largest bank moves to suit its CEO’s tax affairs?
To which I reply, in exactly the same tone of exasperated sarcasm: “And this sort of irrational and autocratic decision by the latter-day nobility is, in some way, surprising to you?”
It is unlikely that HSBC will redomicile, but not impossible. As you point out, it’s ‘Plan B’ for the possibility of Britain’s exit from the EU, so it’s conceivably within reach of an aristocratic whim.
It’s certainly a thing that bankers would say loudly during an election, in the hope that politicians will be even nicer to them.
Oh, and there’s a second item buried in this manufactured ‘news’: HSBC is considering a carve-out of the retail banking business.
All I am saying is that some financial reporters are saying this time its different. These are reports from people that I have deep respect for. So I can only see the changes in the UK being of tax nature personal and for the whole of the group. The UK being one of the smallest markets HSBC has as a group.
Channel 4 and Guardian are not
They agree with me
They would be mad to move to China, in a nutshell
@Nile HSBC has to under EU law separate their UK branch network. The bank branches that supply personal and small business accounts. Some staff are moving to Birmingham, which is where Midland started. Midland is what the Hong Kong bank purchased to expand in the UK.
Perhaps Nile is right. In the 70s I worked for one of the big tobacco manufacturers (OK, my track record on employers is not good – later defense). The HQ was in Basildon and they could have got an excellent deal on a new quality building nearby. But the MD and board members decided that it was much nicer to relocate, never mind the expense, to within a comfortable distance of their homes in Bucks – which is when I was made redundant. Earlier they created an international holding company which had its HQ in dear old Monaco. Monthly board meetings were very pleasant – but costly.
The more I hear about ‘Banks’ — the more I think about their origins in terms of ‘War’ and ‘Dominance’. Banks are the physical vehicles of power. On 21 June it is the bicentenary of the battle of Waterloo (=emergence of Rothschild running bullion around Europe during the Napoleonic wars). On 3 March this year it was the sesquicentennial anniversary of HSBC (= Opium wars, ”World’s oldest drug cartel” [1]).
Perhaps HSBC is thinking about the possible binary nature of future world finance rather than the current unitary model (IMF etc. and US$, for now) and edging its bets? Perhaps is speaking to the neoliberal elite?
[1] http://www.taxjustice.net/2015/02/27/hsbc-and-the-worlds-oldest-drug-cartel/
Don slam the door on your way out……
http://www.bbc.co.uk/news/business-31248913 (helped clients dodge tax)
http://www.bbc.co.uk/news/business-20673466 (1.9 billion $ fine)
http://www.independent.co.uk/news/business/news/rbs-and-hsbc-among-banks-fined-26bn-for-forex-rigging-9857263.html
http://www.thedailymash.co.uk/news/business/hsbc-in-talks-with-somalias-pirate-king-2015042497727
Perhaps you should consider some other factors too
http://www.cityam.com/214474/hsbc-leaving-uk-five-charts-showing-why-it-might-mean-it-time
You are asking me to take the Taxpayers’ Alliance Daily at face value?
Oh please, let’s be serious here
And as for the accounts – do you take them as a true and fair view?
Not seen this publication before — ta for the heads up it had the feel and look of a Daily Mail online redirect.
It did prompt me to think about bank bailouts and who paid? If HSBC has more overseas customers than in the UK, did other Govts e.g. HK & China bail the banks out? This does not get discussed in the press. I know the dialogue is “Its Labour that bust the financial system” so should the UK taxpayer have reimbursed the whole world for Labour’s malfeasance?
Yes!
Brilliant Tony_B, so impressionable and devoid of fact. And HSBC didn’t receive a bailout.
Richard, how about proving the City AM assertions wrong instead playing the man. And they are not moving to China, they are moving to Hong Kong – totally different system financially and legally.
Perhaps those thinking HSBC are mad to leave or those who cannot wait to see the back of HSBC should consider the personal cost if HQ moves and of course the loss of corporation tax and the bank levy (most of it paid on non-UK earnings).
Don your sums – clearly shareholders like the idea.
If you think Hong Kong is not China you have no credibility at all
Read Nils Pratly in the Guardian
@Justin. I did not say directly HSBC had been bailed out by the UK taxpayer, but many banks were. I do remember HSBC, Barclays (?) did not want/need to be recapitalized, and HSBC said they were a boring bank or something like that. I am interested to know how ‘banks’ were bailed out or helped by Govts, including foreign Govts through bailouts, low cost money (QE) etc. I seem to remember Barclays had money from middle east ‘investors’ at the time. And as you observe I may not be very knowledgeable of this complex industry — I’m just a student. I had heard though that HSBC bailed some of its own bad debts $45B, suffering from its own ‘bad’ investment choices. I was motivated to make a contribution to RMs blog to seek who broke the banks – I thought it was sub-prime loans (junk) not Labour, am I wrong? You seemed irritated that we seek to know more about the problems banks have heaped on us, especially a problem since Reagan/Thatcher deregulation.
If other banks had not been bailed out HSBC would have failed
Says a man who thinks the British territories are part of the UK
One country – two systems – read the Basic Law.
I can read gullibility all over your comment
@Justin. HK/PRC Basic Law – interesting to learn. China’s ambassador to the UK said in 2014 “[Beijing] also appoints Hong Kong’s chief executive and principal officials, and amends and interprets the Basic Law.” read article at http://on.ft.com/1KgGTYc . I remember Ambassador Xiaoming being interviewed a few times by Paxman on Newsnight, he was really interesting to listen to – a keen mind.
You say nothing has changed bar the Tory EU referendum threat. But that is potentially massive. So it is wrong to say things are the same as they were three years ago.
I said that was the only issue
Yes, and its a massive issue for a big business which trades in Europe. In fact its so big its not unreasonable to describe it as a potential game changer.
It doesn’t matter to the Hong Kong and Shanghai bank if HKG is China or not.
Oh yes it does
You wait until it needs a bail out
I think the most balanced discussion piece on HSMBC’s decision to review their UK domicile is in today’s Times. Good facts and balance to both sides of the argument. Yes, the article is behind a paywall, but in the days before the internet most of us went out and actually bought a paper to read the news.
Yes the FT article on HSBC is worth reading it concludes that the biggest argument for moving from London to Hong Kong is “Chinese political uncertainty”. Maybe Chinese-UK Ambassador Xiaoming was right in saying “[Beijing] also appoints Hong Kong’s chief executive and principal officials, and amends and interprets the Basic Law.”
Bloomberg 26th April 2015 -“China also asserted the right to interpret Hong Kong’s mini-constitution, the Basic Law.” http://www.bloombergview.com/quicktake/hong-kongs-autonomy
We were told the banks would relocate from Scotland if we voted for independence
Now they say they will relocate if they are properly regulated/or perhaps if the UK votes to leave the EU.
Well, they are entitled to take any decision they like for any reason they like. But it is not reasonable that we should take our decisions on the basis of their preferences: that is open plutocracy, rather than the covert type we seem to be experiencing to date.
Let them go, since there is no help for it within a democracy. It will not matter. Any financial consequences (which are presumably primarily in the form of lost public sector revenue) is not all that important, since the business which generates that revenue will either have to be done by someone and it need not be them; or it won’t, in which case it is not contributing anything important in any case. The increased deficit implied is not important, because the debt and deficit narrative is false, so far as I can see. Some jobs may be lost: but I suspect that most of the jobs are in branches which will either remain open, or will be closed and taken over by someone else (perhaps as a nationalised service)
These large financial institutions are undermining democracy, and they don’t seem to see anything wrong with that. They have caused untold misery across the world, and have been handsomely rewarded for that. And now they object to regulation? It is enough to make a cat laugh.
agree entirely. i wouldn’t let a lying, thieving, sociopath stay in my house however much of their ill gotten gains they might pay me and the same logic should apply to any business with those characteristics resident in the UK.
I look at comments such as ¨may weaken the dominance of the UK in financial markets¨ (referring to HSBC moving) and then look at the elephant in the corner: China.
Presently aggressively shifting themselves and many others from the dollar-dominance of the past, so clearly very interested in also shifting away from UK financial ¨dominance¨.
Let us not forget the quite large, some say dominant, presence of some major banks (mention no names (sic)) in laundering billions of dollars in drug money (didn´t HSBC recently get fined a few billion dollars for same?)
I doubt that many such fines will be levied as HSBC shifts to a laxer (in all respects) regime of regulation.
I suspect that being forced to separate their domestic retail operations from their speculative (and drug-money-laundering) operations is a key factor here.
And finally, if they need any help moving:
https://financialplanning.hsbc.co.uk/events/moving-abroad
doubt they’d give them a pass for robbing the country of Billions in tax revenue either, never mind rewarding them with a place in government.
There are some pointers to suggest HSBC may relocate to Hong Kong and they may well be feeling the pressure of tighter regulation. It may well depend upon how they hope to integrate with the new BRICS banking structure and become less dependent upon the controls enforced by US$ and BIS Basel.
In other words, moving to continue their primary business model: rampant financial crime, unaffected by the requirements of justice.
The bank has been ¨downsizing¨ its UK staffing for some time, and also its HK staffing levels are being reduced. Looking at its worldwide operations, particularly its far-eastern operations, it makes much more sense for them to have their HQ in that area anyway. I suspect their [possible/probable] move is more to do with that, and their publicly stated reasons are more to to with the election that is coming…..they will move anyway, even if the CONservative government get re-elected.
Brazil is struggling to deal with a civil uprising, Russia is sinking with the oil price, India rife with corruption, China is struggling to adjust to reduced demand from overseas, SA i’m not sure about. Add to that speculation that the US is about to cripple many developing economies with an interest rate rise and i can’t see the BRICS doing too well in the short to medium term so i don’t see HSBC looking in their direction for a while yet.
One world – two [dominant] reserve currencies – read the basic signs. Would HSBC hedge its bets?
HSBC already accounts in dollars
At the moment.
However, if China keeps buying gold, and then ties its currency to gold, the dollar will suffer.
There are good reasons for China to do this, and given it has increased its gold holdings enormously and banned the export of same, I expect them to do it.
With the rather massive QE the US has been doing, many countries are feeling the pinch when dealing in dollars.
Time for change: goodbye dollar?
The gold standard?
No way….
I work at HSBC in treasury there, so I will have to be anonymous I’m afraid. I hope it’s understood why.
Firstly – to dispel some myths.
Regional treasuries at HSBC account in the local currency. These treasuries the consolidate into the global treasury in London, which accounts in sterling. Not US dollars as someone wrote above.
HSBC is not overly concerned with the UK leaving the EU. It bought the French bank CCF back in 2000 and most of it’s Euro denominated operations are run from Paris. A Euro exit would not affect that dramatically, and there are already plans in place should it happen. It certainly wouldn’t affect any of the FX, rates or Equity trading operations – and the effects on retail banking would be limited. I don’t think HSBC management want the UK to leave the EU, but it is pure falsehood to suggest that moving HSBC’s domicile is a reaction to a potential EU referendum (which HSBC also think woudl result in a vote to stay in).
The motion to redomicile is being driven mostly by large shareholders, reacting to the increasing costs, both overt and hidden, of remaining in the UK. The bank levy is increasing, bonus taxes make staffing costs uncompetative, basel 3 has dramatically increased costs and balance sheet levies would only make that worse. When bottom line profits haven’t been great lately, removing some of these costs would make a big difference. Remember, HSBC was domiciled in Hong Kong for a long time before the move to the UK.
Respectfully, I don’t believe you
Do you believe Standard Chartered when they say a similar thing? http://www.ft.com/cms/s/0/27d465e0-ed80-11e4-a894-00144feab7de.html
I think it would be easier for Standard Chartered to leave
But the chance that these banks are just playing politics is very, very high indeed
http://www.goldmoney.com/research/analysis/gold-sdr-brics#
I don’t buy it