James Moore: It’s a bit rich for HSBC to moan about being strangled by red tape ...

 

Outlook: “Enough,” cried Douglas Flint, the HSBC chairman and banking industry grandee, as he launched a withering attack on the world’s banking watchdogs.

His chairman’s statement atop HSBC’s results painted a picture of an industry strangled by ever more tangled spools of red tape emanating from a multinational corps of regulators.

A small army of HSBC compliance staff are now apparently burning the midnight oil trying to get their heads around the confusing and sometimes contradictory missives from a bewildering array of watchdogs who think nothing of parking their tanks not only on banks’ lawns, but on each other’s too, with little attention paid to the fact that a bit of co-ordination might benefit everyone.

Meanwhile, his sales staff are now so fearful of the consequences of getting it wrong that they aren’t prepared to do much beyond selling the odd deposit account.

From the tone of it you could be forgiven for thinking that this is an industry whose chieftains are gathering for one last single malt before the authorities sound their collective death knell.

Except that, despite it all, HSBC managed to haul in nearly £7.5bn in profits while promising a return to revenue growth in the near future and basking in the glow of gushing commentary from analysts, who simpered over its “robust” capital generation and “resilient” performance.

It’s worth noting that despite all those expensive and vexatious regulatory changes Mr Flint complained about, HSBC still managed to report costs that were a shade lower than last year’s. Are the staff Mr Flint is so concerned about finding it tough because the regulators are sweating them too hard? Or is it because HSBC’s management is.

There certainly won’t be many of them seeing the sort of “one off” seven figure bonuses HSBC’s remuneration committee tried to hand to Mr Flint – no questions asked – for all his extra work dealing with regulators and governments before shareholders kicked up a fuss.

It was barely six years ago that the world’s financial system was teetering on the brink of a collapse that could have made the Wall Street Crash look as if the world had just found itself a bit short after a big night out.

Since then the banking industry has coughed up a succession of ugly scandals, many of which HSBC is in the thick of, as was made abundantly clear by the nearly eight pages devoted to them in the bank’s press statement.

And yet here is Mr Flint having the gall to argue for the abandonment of the UK’s “ring face” around retail banking, that might provide some protection for the consumer, until the end of a competition inquiry that was itself sparked by the failings of the big banks.

The next thing will be for HSBC to start threatening to up sticks and move out of London. Hang on a minute, we’ve already been there, haven’t we?

Mr Flint might have a case when it comes to watchdogs’ failure to communicate and co‑ordinate, making reforms more complicated (and perhaps less effective) than they really ought to be. But he offered no solutions to the issues he raised, just complaints.

His statement demonstrates that the industry, and HSBC in particular, has lost none of its hubris. It is this, as much as anything, that the consumer needs protection from. A hubris ringfence should be raised, and then electrified, without delay.

... but at least it’s going along with what US regulators say

 One area of progress for HSBC when it comes to regulators is in the reforms it has instituted to ensure it complies with the rules of regulators based in the US.

The $1.9bn (£1.1bn) fine levied on it for allowing itself to become the world’s local bank to Mexican drug cartels might have only amounted to about six weeks’ profits. But it clearly had an impact (although its probation was arguably the greater penalty).

That being the case, it’s hard to see a French-led move to challenge US mega fines like this at the G20 having much of an impact, even given the rare outbreak of unity it has sparked among the EU’s big guns (the UK and the Germans are both on board).

For a start the US Treasury has a ready answer to the French complaint: obey the rules and you don’t get fined.

But even if the Treasury were minded to listen, it’s not clear whether it would be able to stop the avalanche.

Elliot Schneiderman, the New York Attorney General who is pursing Barclays over the operation of its dark-pool share-trading exchange, might actually welcome a little blowback from his Treasury. It would no doubt help his re-election campaign were he able to portray himself as the champion of the people against the Washington establishment in pursuing banks like Barclays.

Those banks don’t lack for opportunities to fight fines, should they choose to do so, and that’s exactly what Barclays has done in the face of Mr Schneiderman’s lawsuit.

If its motion to dismiss – which in a nutshell argues that Mr Schneiderman erred in law and had poor evidence – fails, Barclays will still get its chance to argue its case before a judge.

The French intervention was, of course, prompted by the treatment of BNP, whose $9bn fine for sanctions-busting makes even the mega-penalty handed to HSBC look like chump change.

There’s a reason, however, why BNP didn’t follow the path Barclays has taken. Its conduct was so outrageous that it would have been hard to see any judge finding in its favour.

As I’ve written before, the French – and the EU – may yet get their chance to indulge in a little quid pro quo should they be minded to do so. It isn’t only European banks that have engaged in dubious conduct over the past decade.

The US reaction to any tit-for-tat measures would be entertaining to watch.

Start your day with The Independent, sign up for daily news emails
News
The guide, since withdrawn, used illustrations and text to help people understand the court process (Getty)
newsMinistry of Justice gets law 'terribly wrong' in its guide to courts
News
Bobbi Kristina Brown with her mother Whitney Houston in 2011
people
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
scienceFeed someone a big omelette, and they may give twice as much, thanks to a compound in the eggs
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
PROMOTED VIDEO
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
News
i100
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links