Two of the Treasury select committee’s longest serving MPs have clashed over a series of sessions seeking to establish accountability for HSBC’s alleged tax evasion failures.
In a committee hearing yesterday, chairman Andrew Tyrie said HSBC’s management had sought to pass the buck on accountability for alleged complicity in tax evasion in its Swiss private banking arm, telling MPs in late February local bank staff were responsible for failures in controls.
Tyrie said: “They [HSBC chief executive Stuart Gulliver and chairman Douglas Flint] were very reluctant to suggest that there should be individual personal responsibility for these past actions of HSBC.”
Bank of England governor Andrew Bailey responded that the regulator was satisfied current management were working to repair the business’ failings.
Speaking to Money Marketing following the meeting, Labour MP and TSC member John Mann says: “I’m not satisfied with the answer from Mr Bailey as his answer was about the future, not the past, which is the same line HSBC took at the committee last week. No one is accepting the responsibility or blame for what went on there.”
Asked if he was confident that if HSBC’s failing recurred today, the regulator would be better able to hold management to account, Mann says: “I haven’t been reassured by what I heard today as there seems to be a regulatory reluctance to hold Douglas Flint and Stuart Gulliver to account for the actions of the bank they now run.”
However, fellow committee member and Conservative MP Mark Garnier says politicians should resist the temptation to embark on a “witch hunt”.
He says: “Clearly there was stuff going on, and there will be individuals in Switzerland who may have broken the law, but the difficult thing is that there is a principle that this law is not retrospective.
“It’s very easy to thump the desk and be terribly pious but no one has talked about how we can actually bring people to account.”
Garnier adds: “Anybody who is complaining about personal accountability at HSBC should be complaining about the law at the time, and not the bank, itself.
“A witch hunt is not the way forward.”
Tyrie says a new senior managers regime will increase accountability of staff “at the very top” of organisations.
He adds: “It [the regime] needs to operate not as an initial gateway to taking up a post, but rather as a system through which the regulators deliver continuous supervision.
“If implemented properly, the new regime will encourage greater individual responsibility at the most senior levels.”