HSBC escapes action by City regulator following Swiss tax scandal
Financial Conduct Authority will take no action against bank whose Swiss arm helped clients to evade tax.
HSBC will not face formal action from the City regulator following revelations that the Swiss arm of Britain’s biggest bank helped clients to evade tax.
HSBC was engulfed in scandal a year ago when leaked bank account details showed how the bank’s Swiss unit helped wealthy customers to dodge taxes by concealing assets and handing out bundles of cash to avoid the authorities.
At the time, the Financial Conduct Authority said it was looking at the working practices inside the bank after admitting it had learned about the details of the activities in the Swiss bank from the reports in the Guardian and other publications. However, the FCA has now concluded that review and will not take formal action against HSBC.
The FCA would not comment on the decision, first reported by Sky News, butit said in February 2015 that the leak of the bank account details “has served to reinforce the importance of firms operating with the right culture across all of their operations”.
Martin Wheatley, the then chief executive of the FCA, said: “The allegations are about a Swiss unit of the bank, based on events of predominantly 2005-2007 … We are very closely monitoring the ability of the bank overall … and we think significant improvements have been made”.
Wheatley resigned in July when George Osborne did not renew his contract, sparking speculation that the chancellor wanted to take a softer stance towards the City. A successor for Wheatley has not been named and the regulator ended2015 facing criticism of its decision to end a review of culture at banks that had been outlined in its business plan earlier in the year.
HSBC, which declined to comment on Monday, has repeatedly said it has changed its practices, including an overhaul of its structure that began in 2011.
Last year, the Geneva authorities instructed HSBC to pay a record 40m Swiss francs (£28m) for “organisational deficiencies”. A month ago, Hervé Falciani, an IT expert, was sentenced to five years in prison by a Swiss court for aggravated industrial espionage, data theft and violation of commercial and banking secrecy. Falciani was convicted in his absence and did not attend the trial.
HSBC is currently reviewing whether to keep its headquarters in the UK, where it has been based since the early 1990s following the takeover of Midland Bank. The outcome is expected early this year. The bank has published 11 factors it will consider during the review, which include the government’s tax policy and attitude to financial services companies.
The FCA decision emerged as the bank’s UK arm – which has 17 million customers – tweeted on Monday that people were having problems logging on to online and mobile banking services. Towards the end of the day, it tweeted: “Personal banking customers should now be able to access the mobile app, although we continue to work on a fix for desktop users”.
Source: The Guardian – HSBC escapes action by City regulator following Swiss tax scandal
