On banking, the Conservative manifesto had it right: “Hardworking taxpayers supported the banks during the financial crisis and so the banks should in turn support them during the recovery.” Bankers got rich playing pass-the-parcel with debt, before it transpired that their game was pass-the-parcel-bomb. Some of the banks were bought up outright by the public, but all relied on implicit guarantees and the liquidity that the state washed through the system. The wider consequences of their folly hardly need spelling out: suffice to say that with UK GDP per head still just below its pre-crisis peak, we’re talking seven lost years for Britain.
Contrition, therefore, remains the appropriate mood for the industry as a whole. That is triply true for HSBC, whose reputation has been tainted thrice over since the crisis: first there was the laundering of Mexican drug money, next came massive compensation for PPI mis-selling, and then, most recently, revelations about the Swiss subsidiary’s industrial-scale efforts to cheat the public coffers, by facilitating tax avoidance and even evasion by wealthy clients. In these circumstances, the chancellor and the governor of the Bank of England will today nonetheless keep up with venerable tradition, donning evening dress to join the money men at the Mansion House, with George Osborne set to impress the assembled with a dubious plan to legislate for permanent surpluses. What is truly breathtaking, however, is that HSBC should have used the eve of this event not to approach the chancellor as a humble supplicant but effectively to threaten him.
In many respects, the HSBC strategy review unveiled yesterday was an admission of failure. The swaggering vision of “the world’s local bank” is in retreat, with operations in Brazil and Turkey due to be respectively pared back and sold. Jobs are to be cut back across the planet, including those of 8,000 workers in Britain, arguably victims of the bank’s sluggishness in grappling with the digital revolution. And the 16 years of advertising fees that have been spent on trying to turn HSBC into a trusted high street name – to replace the old Midland after the global giant gobbled it up – turn out to have been wasted. For the bank has now concluded that the post-crisis split between retail and investment banking operations will require it to, once again, rebadge its branches. Full story...
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Contrition, therefore, remains the appropriate mood for the industry as a whole. That is triply true for HSBC, whose reputation has been tainted thrice over since the crisis: first there was the laundering of Mexican drug money, next came massive compensation for PPI mis-selling, and then, most recently, revelations about the Swiss subsidiary’s industrial-scale efforts to cheat the public coffers, by facilitating tax avoidance and even evasion by wealthy clients. In these circumstances, the chancellor and the governor of the Bank of England will today nonetheless keep up with venerable tradition, donning evening dress to join the money men at the Mansion House, with George Osborne set to impress the assembled with a dubious plan to legislate for permanent surpluses. What is truly breathtaking, however, is that HSBC should have used the eve of this event not to approach the chancellor as a humble supplicant but effectively to threaten him.
In many respects, the HSBC strategy review unveiled yesterday was an admission of failure. The swaggering vision of “the world’s local bank” is in retreat, with operations in Brazil and Turkey due to be respectively pared back and sold. Jobs are to be cut back across the planet, including those of 8,000 workers in Britain, arguably victims of the bank’s sluggishness in grappling with the digital revolution. And the 16 years of advertising fees that have been spent on trying to turn HSBC into a trusted high street name – to replace the old Midland after the global giant gobbled it up – turn out to have been wasted. For the bank has now concluded that the post-crisis split between retail and investment banking operations will require it to, once again, rebadge its branches. Full story...
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