HSBC condemns past practices as pressure grows over Swiss accounts
The HSBC bank logo is pictured at a branch office at the Paradeplatz in Zurich February 10, 2015. REUTERS PhotoThe head of HSBC’s private bank has told staff past practices that may have allowed some clients to dodge taxes are unacceptable, with the company facing pressure on both sides of the Atlantic over its conduct.
HSBC this week admitted failings in compliance and controls in its Swiss private bank and faces investigation by U.S. authorities and an inquiry by British lawmakers after media reports said it helped wealthy customers conceal millions of dollars of assets in a period up to 2007.
HSBC has been in the spotlight after the media published allegations based on information supplied by Herve Falciani, a former employee of the bank.
The reports have renewed scrutiny on the world’s second biggest bank, which was fined $1.9 billion two years ago by U.S. authorities for lax controls that allowed criminals to launder money. It was also hit with a $618 million penalty by regulators in November for alleged manipulation of currency markets.
HSBC and Swiss-based banks have been under fire for helping clients avoid taxes for several years. HSBC said past compliance measures and controls failed, but said its Swiss business had since been “transformed” and client accounts had been closed.
Meanwhile, British Prime Minister David Cameron would support HSBC’s former executive chairman Stephen Green going before lawmakers to answer questions about what he knew about tax avoidance at the bank’s Swiss arm, his spokesman suggested Feb. 11.
Cameron appointed Green, a British peer, to be a trade minister in 2010 and his spokesman has said he thinks Green, who is no longer in government, did a good job.
Asked yesterday if Cameron felt it would be useful for Green to appear before a parliamentary committee to explain what he knew about possible wrongdoing at HSBC’s Swiss arm, his spokesman said it wasn’t a decision for the prime minister but that he favored people accounting for themselves.
“The prime minister’s sort of point of principle, you know, is that he’s always of the view wherever possible it is (desirable for individuals to testify),” Cameron’s spokesman told reporters.
“He would support the idea of people coming before select committees and answering questions that parliamentarians have,” he added.
So far, Green has not commented.