THIS week has seen the essence of the banking fraternity emerge after HSBC, Europe’s largest bank, which was rescued by the UK taxpayers in 2008 as the sub-prime mortgage crisis threatened to destroy it, was fined a record £1.2 billion by the US authorities for money-laundering activities carried out on a grand scale.
According to the US Assistant Attorney General, Lanny Breuer, HSBC was guilty of ‘stunning failures of oversight and worse, that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and to facilitate hundreds of millions more in transactions with sanctioned countries.’
Mexican drug traffickers were reported to have deposited hundreds of thousands of dollars a day in HSBC accounts with an estimated $881 million in drug money being laundered through the bank.
Apparently HSBC thought there was nothing suspicious about transporting $7 billion in US bank notes as indeed they found nothing at all suspicious when over a period of four years they cleared $290 million of US traveller cheques for a Japanese bank made out to Russians who claimed to be in the ‘used car’ business.
Not content with being involved in the murky world of drug, the US authorities indicted HSBC for being involved with Saudi Arabian banks that are believed to be associated with terrorism.
The US Senate investigation report on HSBC concludes that the bank did business with Saudi Arabia’s biggest financial institution, the Al Rajhi Bank.
The report claims that after the terrorist attacks in the US on 11 September 2001, evidence emerged that Al Rajhi and some of its owners had links to financial organisations associated with terrorism.
Some ties were resumed in 2006, the report claims, after Al Rajhi threatened to withdraw all of its business from HSBC globally.
It should be noted that the fine imposed on HSBC, although the biggest ever, only amounts to about four days profit for the bank and will be paid in any case through increases in bank charges, by the public.
The HSBC fine followed hard on the heels of another bank scandal this week involving Standard Chartered bank which 24 hours earlier had to pay another £203 million on top of $340 million already paid out to the US for similar offences.
Waiting in the wings for fines is the Royal Bank of Scotland due to cough up for its part in the Libor interest rate rigging scandal for which Barclays has already been fined £290 million.
As if that wasn’t enough Northern Rock, which famously had to be nationalised when it went completely bust in 2008 and was sold off at a loss last year to Branson’s Virgin group, is being forced to pay back £270 million to customers who took out loans from the bank and were overcharged on the interest.
Again all these fines and repayments will not be coming out of the pockets of the bankers but out of those of their customers and in the case of Northern Rock directly out of the taxpayers who were the ‘owners’ of the bank when it overcharged.
Nor will any banker face jail time for crimes of money laundering.
According to US sources the Justice Department wanted a criminal prosecution against HSBC but this was dropped on the grounds that if found guilty the bank would inevitably collapse and bring down every other bank in the world.
Too big to fail and now too big to prosecute.
The bourgeoisie are given to proclaiming capitalism as the very pinnacle of human development, the highest stage of society attainable and vital to the health and happiness of all mankind with the banks sitting at the very heart of the capitalist system.
What this week has proved is that this heart is rotten to the core, brim full of venality and downright criminality serving a corrupt system that is ripe for overthrow by the socialist revolution and thoroughly deserves to perish.