THE giant international bank HSBC is ‘cast-iron certain’ to break the regulatory rules, the laws which are supposed to govern banking practices, again.
These were the words used to describe the bank by one of its most senior executives, HSBC’s global head of sanctions.
The man responsible for ensuring that the bank stayed within the law was admitting that HSBC is too large to regulate and that breaches in the law are inevitable and simply cannot be stopped by him or anyone else.
This admission by Lee Hale was made and recorded during a meeting with lawyers monitoring HSBC and leaked to the Guardian newspaper.
HSBC has been forced to submit to this external monitoring as part of a deal with the US government dating back to 2012.
This deal arose out of the prosecution of HSBC over its money-laundering activities in North America.
HSBC was accused by US prosecutors of being responsible for ‘washing’ hundreds of millions of dollars for drug cartels, organisations associated with Al-Qaeda and for Russian gangsters.
Crimes that, if committed by anyone but a bank, would result in some serious jail time, served at Guantanamo probably, merely led to HSBC being fined $1.9 billion (five weeks profits for the bank). No individual from HSBC was jailed or fined and the bank was to be subjected to outside regulatory monitoring for a period of five years to ensure it didn’t do it again.
What was remarkable was that the US Justice Department for the first time came clean about the reasons for their leniency in a case this serious.
As Assistant Attorney General, Lanny Breuer, told a press conference announcing this deal:
‘Had the US authorities decided to press criminal charges, HSBC would almost certainly have lost its banking license in the US, the future of the institution would have been under threat and the entire banking system would have been destabilised.’
Breuer came back the following week to explain away another slap-on-the-wrist for the Swiss bank UBS which had admitted to its role in the price-fixing scandal around LIBOR interest rates (a conspiracy involving trillions of dollars) again justifying the decision not to bring criminal charges because of fears that it would bring the world banking system crashing down.
‘Our goal here,’ Breuer said, ‘is not to destroy a major financial institution.’
Less than half-way through this ‘monitoring’, which deferred any prosecution, the man in charge of HSBC’s compliance is now cheerfully admitting to lawyers that the bank is simply too large to control, too large for him or anyone else (including governments and central banks) to guarantee it won’t break the law in future – indeed its a ‘cast-iron certainty’ that it will!
His admission, of course, was not for the public. In public, HSBC insists that it is not too big to manage, that the fact that it is a serial offender when it comes to breaking the law is all in the past.
That past includes prosecution in the US for fraudulent selling of mortgage bonds (for which it coughed up $550 million) and most recently the activities of its Swiss division in helping more than 100,000 wealthy people evade hundreds of millions of pounds worth of tax.
Quite clearly all this is not in the past, all attempts at regulation of the banks – as advocated by the Labour leadership – are doomed. The banks are not just too big to fail, they are too big to jail!
The banks are way beyond the control of governments and regulators, completely above the law.
The only law they obey is that of making obscene profits by whatever means possible, and that when they collapse, their huge debts are taken on by the state to be paid for by the working class through austerity cuts.
The banks cannot be controlled – they must be taken over, nationalised and placed under the management of the working class as part of a socialist planned economy.
Only under socialism, after a socialist revolution, will the bankers be brought to account for their crimes.
