There is hardly anything in the internal HSBC documents that leaked to the press from multiple sources this week that will shock anyone who has worked in high finance. A financial institution under pressure and its regulators will become willing to tolerate essentially any transgression by its employees and customers. Tax evasion, bribery, nepotism, smuggling, sexual assault, armed insurrection — it almost doesn’t matter what it is because it officially doesn’t exist if word never gets out.
What makes the HSBC case different is how pervasive the culture of corruption seemed to be and how many regulators knew and took no action. Indeed, one of the figures at the center of the HSBC scandal was appointed to a high government position in what looks like an attempt to help the bank use the power of government to cover up its problems.
Of course, this fell apart with this week’s revelations. Its reputation is so shaken, institutional continuity at HSBC seems to be at risk. Someone in charge has to take the blame.
The new government in Greece is moving forward with reforms after a parliamentary vote of confidence.
The specter of bank failure returned to Atlanta tonight, with state banking regulators closing Capitol City Bank & Trust, which had eight locations and $267 million in deposits. North Carolina-based First-Citizens Bank & Trust is taking over the deposits and purchasing the assets.