12004
Scandals Haunt HSBC
Art And Culture

Scandals Haunt HSBC

First there was money laundering. Then foreign-exchange rigging. Now tax evasion. What’s next?
HSBC, Europe’s biggest bank, has endured a string of scandals – and paid millions in penalties to regulators around the world. But recent revelations that its Swiss private bank helped the wealthy evade taxes are raising new questions about HSBC’s conduct and shining a spotlight on an industry still reeling from the 2008 financial crisis, AP reported.
Politicians and analysts are asking whether big banks, which during the crisis were considered to be too large to be allowed to fail without endangering the wider economy, have also become too big to manage.
“If they’re too big to fail, they’re too big to control,” said Crawford Spence, a professor of accounting at Warwick Business School. “But are they too big to bludgeon into corporate responsibility?”
HSBC Chairman Douglas Flint and Chief Executive Stuart Gulliver may get the chance to answer that question, when the UK Parliament’s Treasury Committee grills them about allegations that HSBC’s Swiss private bank actively marketed tax avoidance schemes that helped as many as 1,000 Britons evade taxes.
While Flint and Gulliver have publicly apologized for HSBC’s conduct, they stress that the issue is an historical one and that the bank has taken steps to ensure proper practices. HSBC has “no appetite” to help tax evaders, the bank said in an open letter published in national newspapers.
The scandal broke this month when reporters mined a trove of leaked documents from 2005-07 for details of 30,000 accounts at the Swiss private bank that held almost $120 billion of assets. The information was turned over to French authorities by a former bank employee.

  HSBC Not Alone
HSBC isn’t the first bank to be hit with allegations it helped clients avoid taxes as governments sought to boost revenue and balance budgets ravaged by the financial crisis.
Swiss banking giants UBS and Credit Suisse have both agreed to fines in the US on allegations they conspired to help Americans evade taxes. The US Department of Justice says it is investigating “numerous additional offshore banks” in Switzerland, India, Israel and other countries.
“Although the political pressure has been on HSBC for helping wealthy individuals avoid tax, other banks will be just as culpable,” said Louise Cooper, a former Goldman Sachs stockbroker who writes the financial blog CooperCity. “If you think this is just HSBC, then you are mistaken. HSBC is just the bank to get caught as the French whistleblower happened to work there.”
But tax evasion is only the most recent issue to damage HSBC’s reputation.
In 2013, the bank agreed to pay US authorities $1.9 billion to settle charges that its practices enabled Latin American drug cartels to launder billions of dollars. US and UK regulators in December fined it another $618 million for failing to prevent manipulation of foreign-exchange markets.
HSBC executives acknowledge that the bank’s sheer size and rapid growth before the financial crisis led to control issues.
HSBC acquired much of its Swiss private bank when it bought Republic National Bank of New York and Safra Republic Holdings in 2009.
“The business acquired was not fully integrated into HSBC, allowing different cultures and standards to persist,” the bank said in a report released this month. “With hindsight, it’s clear that too many small and high risk accounts were maintained and the business was stretched over more than 150 geographical markets.”
Founded 150 years ago as the Hong Kong and Shanghai Banking Corp., HSBC now has more than 6,100 offices in 73 countries. Under Gulliver’s leadership, HSBC has simplified its organizational structure and reduced its workforce by about 17 percent to 257,000.

 

Short URL : http://goo.gl/RkFNpF

You can also read ...

Payman Maadi Joins Michael Bay’s New Film
Actor, director and screenwriter Payman Maadi has signed on to...
Rumi’s Ghazals in Hindi
A book of Hindi translation of a selection of Rumi’s ghazals...
Individuals With No Control Over Life
Adaptation of the surreal satirical play “The Decomposed...
Khosrow Sinai: A Retrospective
Iranian Art Museum Garden in Tehran will be hosting for 15...
Wagner’s Designs, Architectural Plans in Niavaran
An exhibition of Austrian architect and designer Otto Wagner’s...
Persian “Art and Fear” Available
Translator Fattah Mohammadi, who has a special focus on art...
Hamlet on Stage Again
The tragedy of Hamlet by British poet and playwright William...
Artists’ Self Expression on Display
A group exhibition of painting, installation and sculpture by...

Trending

Googleplus