HSBC in Swiss tax dodge scandal

published 12 February 2015

Another week, another banking scandal. HSBC, the world's second-largest bank, stands accused of helping clients evade taxes and conceal assets. Its Swiss private bank allegedly colluded with clients to hide undeclared accounts and allowed international criminals to park their money with it.

The information stems from files leaked by a former employee in 2008 and has emerged from a French tax authority investigation. Around 7,000 UK clients are involved. HMRC says it has clawed £135m back from UK clients using the Swiss branch of HSBC. Lord Green, who was chief executive and then chairman of HSBC from 2003 to 2010, has not commented on the affair.

What the commentators said

He is no doubt "privately appalled" that the Swiss shenanigans happened on his watch, along with the furore over helping drug cartels launder money. He must have been pre-occupied with the crisis and the mess in HSBC's US arm. But if a decent leader can't keep "the corners of his empire on the straight and narrow", it just goes to show that "our giant banks are simply too big".

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But Lord Green "can't just duck all the questions", said Alistair Osborne in The Times. Back in 2000 he was one of two of HSBC's directors who were also on the board of the Swiss bank. He then "had years to change what HSBC now admits were significantly lower' standards of compliance".

In the circumstances, "he should have had enough self-awareness" to rule himself out of becoming a trade minister for the government in 2011, given that the Swiss files had been leaked and ended up in a French investigation, said Alex Brummer in the Daily Mail.

But what grates most about this affair, continued Brummer, is the UK authorities' feeble response to these banking scandals. HSBC has been involved in "activities more appropriate to the Mafia" yet nobody at the bank has been charged or tried.

Indeed, so far only one banker in this country has been successfully prosecuted, and he remains anonymous. HMRC is equally toothless. It's happy to hassle small business owners, but has yet to charge any big fish with tax evasion. "Such is the nature of modern British justice."

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.