- Created: Wednesday, 18 July 2012 19:52
- Published: Wednesday, 18 July 2012 19:52
- Written by The Guardian, with comments by Colin Sumner
The HSBC story makes Barclays' interest-rate rigging pale in the shadows, as a sociological and political phenomenon. HSBC admitted to the US Senate essentially knowlingly, or at least incompetently, laundering the billions in drug profits from the brutally violent Mexican cartels, and billions more from various "terrorist groups and pariah states" [The Guardian - I think they mean Iran, Syria, Burma and Russia, and groups therein]. Moreover, the executive chairman of this bank during the time this all took place, 2003-10 was Lord Green, now UK Minister of Trade, David Cameron's leading banking advisor, and thought to be a candidate for the Bank of England job after Mervyn King!
"HSBC executives admit to US senators that staff at its global subsidiaries laundered billions of dollars for drug cartels, terrorists and pariah states. David Bagley, HSBC's head of compliance since 2002, resigns in front of the permanent subcommittee of investigations, which subjected Europe's biggest bank to a humiliating interrogation over the scandal" (The Guardian, 18 July 2012)
So, let's see the Guardian's highlights of the confessions, after the advert of course:
Then, on Lord Green, see:
and international banking in general:
and on banking reform:
Well done to the Guardian, but Luyendijk does not go far enough: apart from prison sentences for offenders, commensurate with the size of the crime and noting that these are systematic lapses of moral judgement, it is surely time we hung out all the big banks to dry and developed our own national bank. By this I mean let's re-enact the Glass-Steagall separation between retail and investment banking so that if the irresponsible rich want to gamble away their own money they can do so freely and we the nation can enjoy secure retail banking facilities suitably backed and matched by government funding. We need a Bank of England as a retail bank as well as a regulatory bank. That is my view, and I'd be delighted if someone can tell me why we haven't yet done that or at least agreed it....
It would surely have saved the UK over a hundred billions having to bail out what it emerges is a totally corrupt and now systemically incompetent industry. Not only do they not seem to know who to lend money to and who not to, but they seem happy to work for even the most criminal of organizations. They fail to lend to decent businesses that need the money and penalize many of us for failing even briefly to stay within agreed overdraft levels; not to mention the various mis-selling scandals where banks show themselves to be unscrupulous salespeople at heart. Let the guilty banks rot, I say, and pay for their incompetence and complete lack of ethics. If that makes them leave, let them go! Industry bail-outs should only be for deserving causes, such as the NHS, public transport systems and the Royal Mail.
One final theoretical note: it is not a free market economy that the neo-cons or neo-Thatcherites believe in, their practice shows they clearly only bail out weak or incompetent companies and industries where they have friends, and slowly squeeze the life out of public services where they have no friends and little influence. In short, they stand exposed as the high priests of corruption, state asset-stripping and casino capitalism. Alongside their mates, and party donors, the big banks......
So, come on Miliband, set up a national bank with that money reserved for quantitative easing, legislate the separation of retail and investment banking, set adrift the criminal banks to sink or swim with the drug cartels, and raise the statutory level of customer losses to banking negligence to £100,000 as in the USA!