Stuart Gulliver, HSBC and Don Corleone

“Well, I say yes. There is more money potential in narcotics than anything else we’re looking at now. If we don’t get into it, somebody else will, maybe one of the Five Families, maybe all of them. And with the money they earn they’ll be able to buy more police and political power. Then they come after us. Right now we have the unions and we have the gambling and those are the best things to have. But narcotics is a thing of the future. If we don’t get a piece of that action we risk everything we have. Not now, but ten years from now”.
(Tom Hagen advice to Don Corleone. Mario Puzo’s The Godfather 1969)

The Godfather has entered the world’s consciousness. His amoral criminal behaviour is understood along with the corruption of civic society. HSBC shares pathological characteristics with the mafia. Most of HSBC’s business is unexciting, indeed it is dull. Bank teller services, small loans to SMEs* selling insurance and financial products are utilitarian: a galaxy from the pathology of ‘casino banking’. HSBC is addicted to casino banking and employs gamblers.

HSBC isn’t a mafia ‘family’ muscling Moe Green’s Las Vegas casinos. HSBC is a worldwide bank. HSBC has sixty million customers in eighty countries served by 7,500 offices with a quarter of million employees. It had a turnover of $2.63 trillion ($2,630,000,000) in 2014. The CEO of HSBC is Stuart Gulliver**. His response to the £1.2 billion fine for money laundering, paid to US authorities, is classic. He said:

“We accept responsibility for our past mistakes…we are profoundly sorry for them***.”

‘Mistake’ drips with contempt. HSBC’s mistake was $7 billion of Mexican narcotics cash laundered into the USA through a single branch. Mistake? Does HSBC have other mistakes to be ‘profoundly sorry’ about? Actually, yes they do. This should be construed as complicity with criminal activity. Earlier this year (2015) Swiss authorities raided HSBC’s offices saying that HSBC turned, “a blind eye to handling funds for arms dealers and traders in conflict (blood) diamonds.” HSBC’s Swiss customers promptly left (40,000 out of 70,000) this special business unit. Stuart Gulliver said:

It clearly was unacceptable; we very much regret this…”

HSBC responded to complicit criminal behaviour by declaring that one was a ‘mistake’ (£1.2 billion fine) whilst the other was ‘unacceptable’ (£28 million fine). Tom Hagen’s advice to Don Corleone was that if the Corleone family didn’t get into narcotics then the Five Families would, to his long-term detriment. HSBCs ‘Families’ include Barclays. Barclays were fined £284.4 million (May 2015) for rigging the Foreign Exchange rates – other banks were fined $6 billion****. This is a spectacular race to the amoral bottom.

HSBC mirrors the Corleone family in another respect. Michael Corleone moved the ‘Family’ to Las Vegas to develop new business interests after pressure from his wife to go legitimate:

It made me think of what you once told me – in five years the Corleone family will be completely legitimate. That was seven years ago. (Kay) I know… I’m trying darling.” (Michael)

(Michael’s insincere ‘I’m trying darling’ prestages Stuart’s ‘profoundly sorry’ almost as though Puzo was scripting HSBC’s response.)

HSBC is contemplating a move to Communist China. HSBC’s preference for China is astonishing, unless China’s ‘command and control’ economy mirrors their ambitions. Communist China and the mafia share an opaque secretive style, this appears to be attractive to HSBC.

*Small and Medium-sized Enterprises
** June 2015
***BBC News 11th December 2012
****Shareholders pay these fines.

                                                            ADDENDUM

 HSBC’s shareholders have suffered capital growth of minus 2% in the last five years and billions in fines. (The bog-standard Aberdeen UK Tracker Fund returned capital growth of 73% in these years.) Tom Hagen would have given robust advice to Don Corleone to resolve these multiple management failures.

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One Response to Stuart Gulliver, HSBC and Don Corleone

  1. Peter Baxendale says:

    lLife mirrors art-or is it the other way round?

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