Bankers can’t be more saintly than bishops, HSBC chief says
GULLIVER CLAIMS EXECUTIVES BEING HELD TO MUCH STRICTER STANDARDS THAN ANYONE ELSE
HSBC’s chief executive has complained that bankers are being held to a higher standard than bishops as the UK government promised a legal crackdown on banks that facilitate tax evasion.
Stuart Gulliver faced a volley of questions about the tax-evasion scandal that has enveloped HSBC’s Swiss private bank in the past fortnight. Describing the affair as a “source of shame” for him and his staff, he insisted its Swiss private bank had been cleaned up since the controversial practices took place in 2005 to 2007.
“It seems to me that we are holding large corporations to higher standards than the military, the church or civil service,” said Gulliver. “Can I know what every one of 257,000 people is doing? Clearly I can’t. If you want to ask the question could it ever happen again — that is not reasonable.”
George Osborne on Monday announced he will use his budget next month to combat practices exposed by the HSBC tax evasion scandal. Banks, accountants and others who advise clients on how to evade tax could face penalties running to hundreds of millions of pounds.
Closing legal loophole
The Treasury wants to close a legal loophole where individuals can face civil penalties for tax evasion, but the financial professionals that collude with them are not subject to the same punishment.
Gulliver had to defend himself after the Guardian reported that he sheltered millions of dollars of bonus payments in a Panamanian company via its Swiss private bank.
But the HSBC CEO said the structure was purely to protect his privacy and prevent staff in Hong Kong and Switzerland from finding out how much he was paid before he joined the parent company’s board in 2008.
“Being in Switzerland protects me from the Hong Kong staff. Being in Panama protects me from the Swiss staff,” he said. “There is nothing more complicated than that.”
Gulliver said his £7.6 million (Dh43.1 million) pay package for 2014 was docked to reflect the bank’s fine last year for rigging foreign exchange markets.
But Douglas Flint, chairman, dismissed the idea that the chief executive’s bonus should also have been cut for the Swiss private bank scandal as “an absurd set of circumstances”. Flint, who failed to collect a bonus despite being eligible for one for the first time last year, said: “We deeply regret and apologise for the conduct and compliance failures highlighted which were in contravention of our own policies as well as expectations of us.”
Analysts said Gulliver was under pressure to sell or shut more operations, particularly in its underperforming US and Latin American operations. “Look at the share price — it is not going anywhere,” said Ronit Ghose, analyst at Citigroup. “We need more Stuart Gulliver — not less. He is a clever man, one of the better bankers around, and he knows what needs to be done.”