Former HSBC chairman Lord Green has admitted the bank should have been more diligent in its acquisition of a Swiss private bank later found to be aiding tax evasion.
HSBC acquired its Swiss private banking arm in 1999, when Green was responsible for investment banking, private banking and asset management.
Speaking to the House of Lords economic affairs committee, Lord Green described the deal to acquire the Swiss bank as “unusual”, adding that the unit had a “distinctive” client base.
Green said the situation was complicated by Swiss law, which prevented London parent companies from seeing the details of local clients.
He said: “But with the benefit of hindsight, I think it would be right to acknowledge that it would have been good to have drilled into this much more systematically earlier, and we didn’t get everything right.”
Asked by committee chair Lord Hollick whether the bank should been aware of “industrial-scale” tax dodging at the bank, Green said: “It would be right to say, of both myself and my other senior colleagues who were closely involved at the time, that we were very conscious that there were going to be issues in the private bank.”
However, he stressed the bank’s senior management were unaware of any tax evasion happening through the business at the time.
He said: “We became aware of this situation only in around 2010, and indeed the kinds of activity that were described in the media reports earlier this year I was certainly not aware of before reading about them in the media reports. I don’t think any other member of the senior management was either.”
Earlier this year, HSBC chief executive Stuart Gulliver and chairman Douglas Flint told MPs that local managers in the Swiss private bank were to blame for the failings.