The Guardian reported last night that:
HSBC will not face formal action from the City regulator following revelations that the Swiss arm of Britain's biggest bank helped clients to evade tax.
It added:
HSBC was engulfed in scandal a year ago when leaked bank account details showed how the bank's Swiss unit helped wealthy customers to dodge taxes by concealing assets and handing out bundles of cash to avoid the authorities.
At the time, the Financial Conduct Authority said it was looking at the working practices inside the bank after admitting it had learned about the details of the activities in the Swiss bank from the reports in the Guardian and other publications. However, the FCA has now concluded that review and will not take formal action against HSBC.
So what are we meant to conclude from this?
Is it that the Financial Conduct Authority does not care about tax evasion?
Or is it that it thinks it is a normal part of banking practice to promote it?
Or that because it is chaired by a former KPMG partner it just turned a blind eye?
It would be good to know.
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Does the Government have say in the City regulator’s actions?
Indirectly, of course
Some of the answers can be reached by looking at the structure of FCA, as described here in this entry, although it is necessary to read between the lines:
en.wikipedia.org/wiki/Financial_Conduct_Authority
Rowan Bosworth-Davies is much less generous in his analysis but he has worked in this world for many years:
http://rowans-blog.blogspot.co.uk/2016_01_01_archive.html
Happy New Year, Richard
I love some of the quotes in this article, for example:
Banks are operated like Mafia families, they are organised criminal entities, by their very definition. The culture of the banks is entirely criminogenic — they have very strong criminal tendencies and they will purposefully ignore or break any law which gets in the way of their making more and bigger profits.
The chairman of the Parliamentary Commission on Banking Standards, Andrew Tyrie, warned the banks could not be trusted: “Banks require discouragement from gaming the rules. They will always try to do so unless strong disincentives are put in place.”
If there was ever a time to question the wisdom of allowing private ownership of banks, surely this is the time to “get real and smell the coffee”!
It is unbelievable! having in mind general softness of this government on tax evasion it is still strange!it should be addressed in next question time in parliament.
The corruption flows from the too big to fail too big to jail view.
Given that Stiglitz has noted (your previous blog refers) that the banks have failed in their role, which SHOULD be that of intermediaries, I can’t help but wonder whether there are any grounds for claiming that they have committed whole sale fraud and a dose of Icelandic treatment is due!
I’m aware that the “Austrian” economists view the fractional reserve banking system as one big fraud!
HSBC told Osborne they would move their HQ to Hong Kong if there were any attempts to penalise them for fraudulent behaviour or make them pay tax! To which the answer should be – “bye”. We are all paying for fraud by banks etc so the “prestige” of having them here is nil especially as they will behave badly again and we will pay. If they move the HQ then all patriotic UK people should change banks and hit them in the only place that bothers them-their pockets! The mafia are also linked to any fraud so how much do we want to encourage them.
Good point re the ‘move’