HSBC apologizes as more government probes begin

HSBC's letter of apology

Global banking giant HSBC has issued a formal apology via full-page newspaper ads in the United Kingdom, as more countries open formal investigations into the bank and alleged links with scandal and wrongdoing.

Following revelations that HSBC’s Swiss branch serviced some clients with criminal backgrounds and aided other clients evading taxes, backlash has been particularly virulent for both the bank and politicians in HSBC’s home country of Britain, where fierce debate has broken out on the floor of parliament, and where two separate investigations have been launched.

But the bank, some clients, and even national regulators who previously investigated the bank have faced questions in a number of other countries as well, from Tunisia to the United States.

Among the latest reactions:

  • UNITED KINGDOM: HSBC published a full-page advertisement in several Sunday newspapers containing an apology to the bank’s customers and employees in the form of an open letter signed by chief executive Stuart Gulliver. Gulliver described the Swiss Leaks news coverage as a “painful experience” but said the bank’s Swiss branch had been “completely overhauled” in the years since the data was taken and leaked to authorities.

    Lord Stephen Green, the former HSBC boss who was appointed trade minister by Prime Minister David Cameron in 2011, resigned from his position with influential banking lobby group TheCityUK amid growing political pressure around how much the government knew of his role at the bank at the time of his appointment. 

    Calls from business secretary Vince Cable for an inquiry into the handling of the HSBC data by HM Revenue and Customs (HMRC) have been rejected by the Prime Minister’s office, but the Bank of England’s Prudential Regulation Authority has hinted it could open an investigation into HSBC’s conduct through its Swiss branch. Meanwhile, current head of the BBC Trust and chair of HSBC’s audit committee at the time covered by the Swiss Leaks files Rona Fairhead has declined to respond to queries about how much she knew about the activities at the bank’s Swiss subsidiary. 

  • UNITED STATES:  Attorney general nominee Loretta Lynch looks set to face more questions over HSBC’s prosecution in the U.S. after her nomination was delayed by two weeks on Thursday. Republicans Chuck Grassley and David Vitter have both indicated they believe the Swiss Leaks revelations raise new and important questions about a controversial settlement Lynch reached with HSBC in 2012 after the bank admitted to facilitating money-laundering by Mexican drug cartels and helping clients evade US sanctions. 

  • SPAIN: A court in Madrid has launched an investigation into the amnesty offered to clients of HSBC Private Bank (Suisse) who owed taxes to Spain, following a complaint by the union representing tax workers that the amnesty was an attempt to “offer impunity” to suspected tax evaders.   

  • NEPAL: The government will launch an investigation into Nepalese clients of HSBC’s Swiss branch to look for potential tax evasion. The government has also been asked to push ahead with an agreement with Switzerland for mutual legal assistance, and to try to gain access to more data through diplomatic channels. 

  • BRAZIL: The tax watchdog has opened an investigation into whether close to a dozen people involved in the Petrobras corruption scandal also allegedly held undeclared accounts with HSBC’s Swiss branch. Sources told Reuters there was a link between the Swiss bank and the corruption scandal, where politicians used the state-controlled oil company to skim billions through overpriced contracts. 

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