ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

HSBC: Time To Say "Goodbye"

Updated on May 30, 2013

What The Investigation Found

The United States Senate Committee recently (July 2012) investigated HSBC, one of the world's largest banks.

The Senate investigation found an astonishing situation.. There is a worldwide clamp down on cash transactions because cash is often associated with drugs, terrorism, tax evasion or other crime. Yet HSBC took in $15 billion in cash in places like Mexico and Russia and other countries where there is a high risk that cash is generated from criminal activity.

From mid 2006 until mid 2009 there was no monitoring of these cash receipts by HSBC management.

A Saudi bank known to be involved with terrorism ordered and received $1 billion in cash. A fairly obvious question is why anyone would have a legitimate use for $1 billion in cash.

Iran of course is one of Reagan's "axis of evil" countries. For years it has been under international financial and trade sanctions because of its failures to co-operate with the world community over its nuclear developments. HSBC helped 25,000 transactions with Iran, totalling $19 billion. The Iran link was concealed by HSBC in 80% of the transactions.

A recent audit found that 41% of bank accounts in HSBC's Cayman Islands branch had no customer information recorded.

Bearer shares are an effective way of transferring assets with no paper or electronic record. HSBC opened more than 2,550 bearer share companies in various suspicious locations.


Did HSBC Know?

The emails and letters flying about in HSBC make it clear that HSBC did know. The Mexican Government twice warned HSBC that HSBC Mexico was being used for moving drugs money.

The Head of Compliance emailed the Chief Executive and Chairman Lord Green some years ago to express his concerns about the general compliance situation. Everyone at the top knew or chose not to know.

What Is To Be Done?

HSBC are expecting a world record compliance fine of $1 billion. They say they will investigate internally to find out how this happened and make sure it does not happen again.

No-one believes this is an adequate solution to the problem. The "blind eye" culture will remain. When one looks at the profit HSBC made on the $19 billion to Iran and the profits HSBC makes on the many millions of dollars in shady HSBC accounts, a $1 billion fine is simply not enough.

Of course HSBC is not the only shady bank. There is a culture across all the large banks to do as much as they can get away with. Eventually someone gets fired and there are fines to pay, but the culture of dishonesty is just too profitable.

With children, "Mummy Means It" sometimes has to be backed up with a significant action. The USA and UK and other countries have a right to expect our laws to be upheld. So the regulators should give HSBC one month to close down their operations in the USA and Britain. After 10 years HSBC will be able to re-apply, but they will have to show they are clean.

Other banks will get the message that the licence to operate really does mean that a bank has to obey the law. Until action of this nature is taken banks will continue to believe they can get away with it.

Comments

    0 of 8192 characters used
    Post Comment

    • Terri Meredith profile image

      Terri Meredith 

      6 years ago from Pennsylvania

      Well, in defense of some who choose not to change banks...let's face it: changing banks can bring on so much headache that we end up punishing ourselves while the bank in question doesn't really miss our little accounts compared to the billion$ at their fingertips from doing shady business. I agree with Charles..close the banks down and put them on a "time out". I also agree with him that it's not likely to happen anytime soon. Our world is ruled by the wealthy elite, who have become wealthy by means that certainly are not all above board.

    • Amanda Severn profile image

      Amanda Severn 

      6 years ago from UK

      The astonishing thing is that ordinary, every day people continue to use these banks, despite all the adverse publicity. They say that people are afr more likely to get divorced or move house than they are to move their bank account. It's time for a culture change!

    • Charles James profile imageAUTHOR

      Charles James 

      6 years ago from Yorkshire, UK

      Our Conservative Trade Minister is an ex Chairman and CEO of HSBC. Don't hold your breath!

    • FitnezzJim profile image

      FitnezzJim 

      6 years ago from Fredericksburg, Virginia

      It seems likely that the Brits would take action before the Americans do. Americans tend to coddle their criminals.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)