Saturday, 14 February 2015

The Highly Suspicious British Company better known as HSBC


The Treasury Select Committee launched an  inquiry into Offshore Financial Centres on 30 April 2008 ( ) On1st July, it took oral evidence from two senior banking executives, Catherine Weir, of Citi Private Bank, and Chris Meares, of HSBC Private Bank.

The following exchange is extremely interesting in light of this week’s revelations of the activities  of HSBC Private Bank in Geneva..

Q68 John Thurso (Liberal Democrat): How much of your work as a private bank is about keeping your clients informed as to where the best place is? Or is that coming back to the start of the process?


Mr Meares: More the start of the process, rather than evaluating each jurisdiction as time goes on.


John Thurso I presume that you have a duty from a regulatory standpoint to ensure that tax evasion is prevented when you are dealing with your clients and with oVshore financial centres. Can you confirm that? How do you give it effect?

Mr Meares: Correct. We prohibit our bankers from encouraging or being involved in tax evasion.

Q70 John Thurso: What do you do?

Mr Meares: If our bankers, say, sitting here in the UK, get any hint that there is tax evasion, then under the legal and regulatory system they have to file a suspicious transaction report. That is the main way. If they have a suspicion that it is happening, then we file a suspicion transaction report to the authorities.

John Thurso: Thank you.

Q71 Chairman: Have you filed quite a number of suspicious transaction reports?

Mr Meares: Not huge numbers, I am pleased to say, but there are a few and they all get dealt with. ……For the large global institutions, like ourselves, it has to be self-policing. Our reputation is the first thing. In running our business, I can assure you, the Chairman and the Chief Executive would not want us to have anything that would affect our reputation.

Chris Meares was hired by Bridgepoint to join Quilter Cheviot in May 2012 to be Chairman of the Board and the Audit & Risk Committee. He has over 30 years experience in financial services working with the HSBC Group both overseas and in the UK, and was Group General Manager and CEO of Global Private Banking for HSBC for the last 5 years of his career. - See more at:;

Baron Green of Hurspierpoint, who  over the weekend resigned as co-chair of business lobbyists TheCityUK’s advisory council with immediate effect, after a week of political turmoil over his role as a Tory Trade minister as appointed by David Cameron in 2012, was another former HSBC big  hitter, as a previous chairman  of HSBC. Here is a selection of his bons mots on banking ethics when he was a minister:
“(That) means ensuring that our tax regime is attractive, that we minimise unnecessary red tape…” (House of Lords Official Report, 5 July 2012: Column 837)
“More generally on business banking, there is a clear need to reinvest properly in business banking. In some ways I am better placed than many to say this.” (House of Lords Official Report, 9 October 2012: Column GC422)
“…the skill base of business banking in high street banks has been deteriorating. This has happened partly because average career bankers with a reasonable dose of ambition have wanted to head either for the excitements of corporate and investment banking or for the sexy end of the retail banking market and did not see themselves spending the rest of their career in a relationship management role in, let us say, Rotherham. ….., it is that all the CEOs with whom I have regular dialogue and the heads of commercial banking are focused on this and are determined to address the problem. I hold regular round tables with the banks under the auspices of the British Bankers’ Association. The general problem, I have described. In international trade, in particular, there is even more of a problem with the skill base. They are focused on that. The challenge is that it will simply take time to turn the supertankers…I do not believe that those other financing sources can ever be an adequate alternative to, or substitute for, a properly run business banking presence on our high streets." (.” (House of Lords Official Report 26 June 2013: Column 830)
A third HSBC bigwig, Douglas Flint, Group Chairman of HSBC Holdings plc,  told a House Of Lords Economic affairs committee hearing on  21 October last year: “Importantly too, the banking system is heavily regulated, and therefore there is a massive line of sight through the supervisory mechanisms, which are much more intensive than they were historically, to see what is going on and what is happening in the economy.”
In another observation, he said: “It is entirely right that people talk about the culture of our industry; it is deeply depressing that people believe that the culture six years after the crisis is still flawed. There may be elements, but if the people running banks today are not the right people, that is a shameful reflection on the regulatory apparatus not to have replaced those who do not get it. I believe the people in the industry today do get it, because it is not much fun rebuilding from where we have come from.”
He also shared this insight into banking practice: “The analogy I use is that the financial system is a bit like a big jigsaw box and the regulatory reforms are effectively pieces thrown into the jigsaw box, but no one is given the lid with the picture on it. There are an awful lot of pieces that are really important and they all have a function, but until you know what you are trying to create it is very difficult to make the picture.” in asserting “I am a simple fellow.”
(published in the Committee report, The post-crisis EU financial regulatory framework: do the pieces fit?, on 2 February 2015)
In a House of Lords debate on overseas tax havens held in March 2009, Tory peer Baroness Noakes, a Director, Royal Bank of Scotland Group as well as a shareholder in  amongst other companies, Barclays plc, JP Morgan American Investment Trust plc (United States), JP Morgan Chinese Investment Trust plc, JP Morgan Indian Investment Trust plc, Standard Chartered Bank plc, Aberdeen Japan Investment Trust,  Legal & General plc , as well as HSBC, recalled a quotation from Lord Clyde said in the 1929 Ayrshire Pullman Motor Services case:
“No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores”.
(Lords Official Report, 26 March 2009: Column 782)
Her selection of a quotation dating from 86 years ago to justifying the minimising of the payment of tax sums up an all too prevalent attitude of the rich and politically powerful in Britain today.
As the now late multi-millionairess, Leonora Helmsley, owner of the Empire State Building - and dubbed ’Queen of the Mean’ - once notoriously asserted when being prosecuted for tax evasion in 1989 ( for which she was jailed):  “Only the little people pay taxes.” (


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