HSBC gags analysts on talking politics as banks fear backlash
LONDON — Major banks are clamping down on market analysts talking publicly about politics for fear of appearing to take sides, with HSBC taking its main global currencies commentator off air in an intensification of the crackdown.
Currency strategists at HSBC’s global research division would not be making unsupervised public appearances due to concerns about commenting on political events which have been seen to drive prices, a source at Europe’s biggest bank said.
A source at Credit Agricole said strategists at the French bank had been instructed not to talk about the details of the French presidential campaign, which has moved the price of the euro currency.
Other major banks including Citigroup, Barclays and Bank of America already have tight controls in place aimed at keeping comments by strategists politically neutral, but a blanket ban on public appearances is unusual.
David Bloom, who declined to comment, and other currency analysts from the bank would not be appearing on television for some time, the HSBC source said.
As HSBC’s chief currency strategist, Bloom was among the most outspoken commentators on the impact on sterling of the British vote to leave the European Union. He correctly forecast a dramatic fall and then dubbed the pound the government’s “de facto official opposition” as it sank after the vote last June.
“We are still engaging with the media. Our economists are engaging, our equity strategists are engaging,” one source at HSBC said, asking not to be named.
“But politics is something the bank does not want to talk about and currencies are probably the front line of where we could actually be drawn into something that we would want to avoid. This is a temporary thing.”
HSBC has enforced a global crackdown on bankers’ interactions with the media over the past two years, other sources at the bank told Reuters, including reducing the number of staff approved to talk to the press and requiring bankers to notify public relations whenever they meet with a reporter.
The source said that Bloom and other currency strategists would continue to meet clients and write regular research.
SHAKY GROUND
The HSBC move follows a number of European banks tightening up on how freely currency market analysts are allowed to speak to the
media and in public situations in the past three years.
Part of that has been driven by a tightening of regulation after several of the world’s biggest banks were fined billions for manipulating the $ 5 trillion a day global currencies market. Banks are also preparing for changes imposed by Europe’s MiFID II banking regulations at the end of this year.
But several banks also told strategists not to comment publicly on the Scottish independence referendum in 2014, and there were widespread limits on how freely analysts could discuss last year’s Brexit vote for fear of breaking electoral rules and alienating customers.
French, German, Dutch, and possibly Italian elections are seen as carrying similar risks for the euro this year to the waves of selling that have hit the pound in the past 12 months.
Several other of the top 10 banking names in the global currencies market, including Citi, Deutsche Bank, Barclays and BNP Paribas, declined to comment.
But strategists from several banks said that following the surprise election of US President Donald Trump and last year’s Brexit shock it was now standard practice to be told to steer clear of discussing the details of what was positive or negative for markets in the political sphere, for fear of being seen to make unqualified judgements on policy or politics.
“It is very common now for there to be limits,” said a strategist with one European bank.
“What the market thinks about (French presidential candidate) Marine Le Pen is not purely about economics, it’s about the broader political risks, which then might play out in demand, growth and so on. Am I qualified to talk about that?” the strategist added.
“Is it really clear what is moving the market? It is obviously shaky ground.”