Too big to fail - and now too big to fine?

Graham_Devon

Interesting one this one.

Essentially US regulators refused to fine HSBC for money laundering activity in 2012 as the fine could have triggered a "Global Financial Disaster".

A report details how UK officials, including Osborne added to the pressure to avoid fining HSBC by warning the US that it could lead to financial turmoil.

The US report states that the UK hampered the probe and influenced the outcome.

The report says: "George Osborne, Chancellor of the Exchequer, the UK's chief financial minister, intervened in the HSBC matter by sending a letter to Federal Reserve Chairman Ben Bernanke... to express the UK's concerns regarding US enforcement actions against British banks."

The letter said that prosecuting HSBC could have "very serious implications for financial and economic stability, particularly in Europe and Asia".

Justice Department spokesman Peter Carr said a series of factors were considered when deciding how to resolve a case, including whether there may be "adverse consequences for innocent third parties, such as employees, customers, investors, pension holders and the public".

The report also accuses former US Attorney General Eric Holder of misleading Congress about the decision.

The report says Mr Holder ignored the recommendations of more junior staff to prosecute HSBC because of the bank's "systemic importance" to the financial markets.

Thoughts?

The settlement agreed meant that HSBC did not need to testify either guilty or not guilty - however, the criminality was proven.

http://www.bbc.co.uk/news/business-36768140

Thrugelmir

The US does seem to have adopted a policy of imposing fines on a global basis. Rather than activity that relates purely to that within the US. One then suspects how the fine is arrived at. As the full facts won't be available. The treatment of BP after the Deepwater Horizon disaster in many regards was very shabby. The attitude being that it was a British company so let's milk it for everything we can.

michaels

Funny - I read this story as the authorities decided not to press criminal charges agaisnt directors - as far as I know there was a >2bn usd fine?

Not saying it is not a story (it is) just that starting the thread with the correct facts would make for a better discussion.