Skip to main content

Bank Pays Bribe To Avoid Prosecution

Bank Pays Bribe To Avoid Prosecution
HSBC fine: what does it take for a bank to get prosecuted?
By Nils Pratley
December 11, 2012 "The Guardian" - -  Is HSBC's $1.9bn (£1.2bn) fine enormous or a drop in the ocean?
Well, it's a record for the offence of money laundering and breaking sanctions, which could be said to underline the gravity of the bank's actions. On the other hand, the sum represents about four weeks' earnings given the bank's pre-tax profits of $21.9bn last year.
The financial pain is easily bearable. Indeed, the steady upward progress of HSBC's share price since the scandal exploded in July was unaffected on Tuesday morning.
Shareholders like the idea the affair is settled and they trust that chief executive Stuart Gulliver's new-broom regime won't fall foul of the US department of justice's new independent monitor,k who will assess how the bank implements its pledges to do better.
Gulliver even has a glowing testimonial to wave as HSBC starts its probation period. "Management had made significant strides in improving 'tone from the top' and ensuring a culture of compliance permeates the institution," said the DoJ.
But HSBC investors may also like something else. The New York Times reports that some DoJ officials wanted to bring criminal charges against the bank but eventually decided not to for fear such a move would put the future of one of the world's largest banks at risk and thus threaten global financial stability.
We don't know the weight of that tale and maybe the fear of financial chaos was exaggerated. But the idea that a bank could be "too big to prosecute" is alarming. It sends a message that, whatever the scale of wrong-doing, the world's biggest banks can never lose their licence to operate overnight. Instead, a hefty fine can always make the problem go away.
Is that really a sensible message for regulators to send? Is their hand really so weak? On this occasion, HSBC's words of contrition and promises to behave properly sound sincere. But will that always be the case for all big banks everywhere and forever?
The DoJ should clear up this sub-plot speedily. If money laundering on the scale admitted by HSBC doesn't provoke a prosecution, what would?

Comments

Post a Comment

Popular posts from this blog

Israeli school segregated Ethiopian students » Ethiopian Review

Israeli school segregated Ethiopian students » Ethiopian Review : "The placement of four Ethiopian girls in a separate class from their peers at a Petah Tikva grade school has sparked accusations of segregation on Tuesday morning following a report in Yediot Aharonot. According to ‘Hamerhav’ principal, Rabbi Yeshiyahu Granvich, complete integration of the girls was impossible. The reason being, said municipal workers, was that the students were not observant enough, nor did their families belong to the national-religious movement that the school was founded upon. Among the differences in the daily school life of the girls, a single teacher was responsible to teach them all of their subjects. Worse yet, the four were allotted separate recess hours and were driven to and from school separately. Such action has been labeled by observers as “apartheid.”"
Post a Comment
Read more

  1 Million Dead in Iraq? 6 Reasons the Media Hide the True Human Toll of War -- And Why We Let Them    :      Information Clearing House: ICH

  1 Million Dead in Iraq? 6 Reasons the Media Hide the True Human Toll of War -- And Why We Let Them    :      Information Clearing House: ICH By John Tirman July 20, 2011 "Alternet" - - As the U.S. war in Iraq winds down, we are entering a familiar phase, the season of forgetting—forgetting the harsh realities of the war. Mostly we forget the victims of the war, the Iraqi civilians whose lives and society have been devastated by eight years of armed conflict. The act of forgetting is a social and political act, abetted by the American news media. Throughout the war, but especially now, the minimal news we get from Iraq consistently devalues the death toll of Iraqi civilians. Why? A number of reasons are at work in this persistent evasion of reality. But forgetting has consequences, especially as it braces the obstinate right-wing narrative of “victory” in the Iraq war. If we forget, we learn nothing. I’ve puzzled over this habit of reaching for the lowest possible estimates ...
Post a Comment
Read more