Hanging 20 bankers at the end of the street won't help, says Blair

Same story from the BBC:

www.bbc.co.uk/news/business-19155577

More suspect banker behaviour written about in today's New York Times:

'' The Standard Chartered Bank is being accused of hiding roughly 60,000 illegal transactions with Iranians. The New York State Department of Financial Services is accusing the British bank of deliberately falsifying records in order to cover up the transactions, which are reportedly worth $250 billion. U.S. law requires transactions with Iranian banks to be closely monitored, in order to prevent the use of American banks to finance the country?s nuclear programs or terrorist organizations. According to the report, Standard?s dealings ?left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes.?

edam No, I'm right. HSBC have been accused (and have been caught bang to rights) by the US senate for not having anti-laundering mechanisms in place. The bank should certainly have investigated all suspicious activity and, it appears, that that hasn't happened. To make the assumption, however, that HSBC were actively colluding in money laundering activities is a leap too far. Either way, let us await the outcome of the proceedings before jumping to conclusions.

Your second point, that they handled money from countries on the US sanctions list is irrelevant. HSBC are a massive business with subsidiaries all over the world. Each of these subsidiaries will have been registered with their host nation and will be subject to that country's particular rules and regulations, not American ones. These countries have no obligation to recognise the US sanctions list. It therefore stands to reason that a US senator has no more jurisdiction over a non-US registered bank as we might expect our government to have over a US registered one. You can argue the ethics of this for as long as you like but, in this instance, I don't think the Senator has a leg to stand on.

As for a Saudi bank with links to al-Qaida; what constitutes a link? Did Bin Laden once open up a current account with them before 9/11? Did al-Qaida have a business account there which was picked up by the compliance team and reported to the relevant authorities? It is perfectly possible to establish a link between almost any unpalatable figure and any legitimate business - until those details are known I'd rather give the benefit of the doubt... You know, innocent until proven guilty and all that.

Ooh dear

I'm afraid you are wrong, MrJP. HSBC was actively involved in laundering dirty money according to the US Senate 'A report compiled for the committee detailed how HSBC's subsidiaries transported billions of dollars of cash in armoured vehicles, cleared suspicious travellers' cheques worth billions, and allowed Mexican drug lords buy to planes with money laundered through Cayman Islands accounts.

'Other subsidiaries moved money from Iran, Syria and other countries on US sanctions lists, and helped a Saudi bank linked to al-Qaida to shift money to the US.'

Funny how the banker's pals always try to pretend there's nothing much to see round here and we should move along - even when the bankers have been caught bang to rights. Yet again. And resigned in front of the US Senate.

Fair enough - love in still in place,however reluctantly you may shy away from my hippy embrace. :)

Breadandbutterfly Sorry to break up the 'love in' so soon after peace has broken out but HSBC were prosecuted for not having mechanisms in place to prevent drug cartels from laundering money through the bank. AFAIK, there was no proof, or even suggestion that HSBC were actively involved in money laundering or any other criminal behaviour, merely that they left themselves open for abuse. This is a subtle but important distinction which should be made.

Mr JudgeyPants - we appear to agree. Not on all issues, certainly, but on this one, happily. :)

Edgar, could you clarify your post above, then, which I obviously misunderstood?

" " You do realise, Edgar, that by your definition criminals and thieves are just good businessmen as they are succeeding in making money according to the supposedly iron law of everyone acting in their own self-interest alone?"

criminal = someone who breaks the law.

i have placed no moral judgement on the purposes of businesses. "

This was following on from your earlier post that:

"the purpose of a bank is to make money. it may provide useful (or, for modern life, essential) services as a by-product. "

Could you therefore clarify in what way criminals are not the same as bankers (ignoring the crossovers, obviously, like HSBC and those Mexican drug cartels ) - given you have claimed that the social utility of what both do is irrelevant and you do not judge businesses on moral grounds?

Thanks.

or anything from which that could be implied even?

"
Edgar - you appear to see breaking the law as perfectly valid as long as it makes money. How do you prevent society breaking down in this lawless fantasy of yours?"

what the fuck? where have i said any of this?

And some of those grannies turn up with a rolled up copy of the people's paper under their arm. Some of those grannies ask why we can't implement a Glass Steagall type act to control the "masters of the universe", just like the USA implemented after the banker's margin trading excesses which led to the Great Crash of 1929 and plunged teh world into a subsequent Depression. Some of those grannies wonder whether that would force bankers to care a bit more about "sertvices to the community" than "services to banking" and "services to their bonuses". Some of those grannies want a return to morality to curtail the "moral hazard" of some immoral bankers. Some of those grannies wonder why this can't be implemented and wonder if it because of the bankers' deep pockets which they use to lobby and push their hobby horse of "services to banking" - their deep pockets filled flush with cash from the public purse .

'They make this money for their shareholders, not their employees ("bankers").'

I thought it was vice versa. There are a lot of grannies who turn up at AGMs who who may not agree with you.

Bread - That was edam's statement, not yours.

Breadandbutterfly "If in fact they are not fulfilling their function for society as a whole... then we might as well... stop bunging cash to all of them, and let them face market forces and see how well they can stand on their own two feet without taxpayer support."

I've truncated what you wrote (hopefully sympathetically) because I think this is the absolute nub of the issue. I don't think we should have ever nationalised the banks any more than we should have nationalised British Leyland or the Lower Clyde Shipyards when they ran into difficulty. Unsustainable businesses are just that; unsustainable.

"Nevertheless, profit and sustainability are not the same things. The banks do not pay huge bonuses in order to make them sustainable. They would be sustainable with much lower profits and salaries."

The first duty of any business, whether it seems ethical or not, is its responsibility to maximise returns for its shareholders. Whilst the point you make is perfectly valid, I suspect that, like in Premiership football wages, what we've seen is an arms race where good executives, like good players, are deemed to be worth higher pay. In order to attract what are perceived to be the best staff, the company must pay ever inflating wages until we reach a situation where top executives? pay bears little relation to their actual worth.

"The question is whether they are worth sustaining at all if they do not provide a social utility AND are not capable of earning enough to make themselves sustainable let alone make a profit, without trillions in taxpayer support."

Perfect - agreed 100%.

"It seems that those who are most in favour of unbridled capitalism in general and it being fine, indeed desirable that banks make and keep large profits in the good times, are the same ones who here argue unashamedly for the socialisation of the banks' losses in the bad times."

Those people are idiots, not capitalists.

Finally, Claig, I love the way you can shoe horn an advert for the Daily Mail into every topic you post about. It must take a lot of skill, dedication and, perhaps hardest of all, actually reading the Daily Mail. I tip my hat in your general direction. Have a .

Edgar - you appear to see breaking the law as perfectly valid as long as it makes money. How do you prevent society breaking down in this lawless fantasy of yours?

Cote D'Azur. Could you explain why my statement is "ridiculous"?

Stating it as such is hardly sufficient argument.

Thanks.

"
You do realise, Edgar, that by your definition criminals and thieves are just good businessmen as they are succeeding in making money according to the supposedly iron law of everyone acting in their own self-interest alone?"

criminal = someone who breaks the law.

i have placed no moral judgement on the purposes of businesses.

Er, HSBC...that would be the bank that made a profit by laundering Mexican drug money? So a great example of how banks SHOULD work...

Of course, in practice you'd have to be an utter fool not to understand that ALL the banks are receiving billions of pounds of taxpayer support, not only via direct bailouts but by the implicit guarantee that they will be backed up by sovereign states ir taxpayers. Hence they can get all of the reward but with none of the risk that should justify those rewards.

"
Given that all/nearly all the banks would have gone bust were it not for trillions in taxpayer support then by that definition are banks charities"

some banks (Hsbc for one) did not receive any money. and still turn a profit!
receiving public money (or being bought by the state) does not make something a charity.

charity = a not for profit organisation
business = a for-profit organisation.

i fail to see what is so hard to understand.

"If they only existed to make money then we wouldn't have bailed them out"

That is a ridiculous statement. It is a good thing that "we" don't ask you before implementing financial & economic policy.

"the purpose of a bank is not to make money. Or at least, that may be their real purpose, but it's not their public utility, it's not what we bailed them out for, so they could make more bankers rich!"

You people don't get anything, do you?

The purpose of a bank is to make money, just like the purpose of any company is to make money. They make this money for their shareholders, not their employees ("bankers"). Employees get whatever is in their contracts (fixed salary + performance bonus). Shareholders get the benefits of the profits (dividends + appreciation in share price).

Your state didn't bail out failing banks so their profits could henceforth be shared among people other thank their shareholders. Those banks we're bailed out to uphold the system and prevent a crisis of confidence.

If you don't even get such simple basics, you really should stick to banker hunting on Daily Fail forums.

As an aside, that paper is popular with the people, but possibly not with teh top bankers, as it tells it like it is.

'I don't think I'm that unusual in this.'

Here are some articles by Sir Max Hastings, a former editor of the Daily Telegraph and the Evening Standard, that appeared in the paper of the people

www.dailymail.co.uk/news/article-2038147/Bankers-looters-suits-Weve-learnt-Lehmans-Brothers-crash.html

www.dailymail.co.uk/debate/article-1163623/MAX-HASTINGS-Seize-Porsches-throw-jail-Shameless-bankers-worse-Train-Robbers.html

Or to put it another way: Edgar, you said:

"the purpose of any business is to make money. if not : see 'Charity'. "

Given that all/nearly all the banks would have gone bust were it not for trillions in taxpayer support then by that definition are banks charities? And if they are, are they really our ideal charities of choice? Personally, I'd rather my 'charity' money (aka public sector tax £) was spent on things like making sick people better, providing support for disabled people or educating children, rather than buying another banker a new yacht.

I don't think I'm that unusual in this.