HSBC in Swiss tax dodge scandal

The world’s second-largest bank, HSBC, stands accused of helping clients evade taxes and conceal assets.

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".

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."

Most Popular

The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism
Economy

The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism

Russell Napier talks to Merryn about financial repression – or "stealing money from old people slowly" – plus how Asian capitalism is taking over in t…
16 Jul 2021
Three companies that are reaping the rewards of investment
Share tips

Three companies that are reaping the rewards of investment

Professional investor Edward Wielechowski of the Odyssean Investment Trust highlights three stocks that have have invested well – and are able to deal…
19 Jul 2021
The future belongs to emerging markets – three EM stocks to buy now
Share tips

The future belongs to emerging markets – three EM stocks to buy now

Professional investor Carlos von Hardenberg of Mobius Capital Partners picks three of his favourite emerging-market stocks.
5 Jul 2021