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As if you weren’t peeved at banks enough: Now comes HSBC.
The two seminal issues of America’s 21st century have been the War on Terror and our ongoing economic malaise.
The two are not independent of one another. Undoubtedly, the vast treasure we have spent pursuing bad guys has been a drain on our economic strength.
It now turns out, however, that there is a private-sector player which has been up to mischief in both arenas. That player is HSBC.
If you’ve been reading around the edges of mainstream news, you might have seen a small item about HSBC. Federal and state authorities just settled with the bank for a payment of $1.9 billion.
This levy was not because HSBC was keeping shoddy records or had mis-reported the state of its financial ship.
No, HSBC was nailed because it was helping launder money for a) drug cartels b) terrorists and c) “rogue” nations, such as Iran.
HSBC has no local presence: the nearest branch I could locate is in the D.C. suburbs. Yet, there’s no denying its mighty reach. HSBC is estimated to be the third largest bank in the world and the biggest in Europe. It does have a large presence in the U.S.: 470 branches and four million customers. That presence, apparently, was used as a base of bad behavior.
A recent report by the U.S. Senate accused the firm of helping Iran move billions of dollars, actively eluding the scrutiny of U.S. regulators.
The bank was also accused, among other things, of helping Mexican drug lords launder their ill-gotten gains as well as providing funds to banks in Saudi Arabia and Bangladesh that have links to terrorist financing.
The sum of charges is both staggering and sickening.
Now, on the face of it, you might think that a fine of $1.9 billion is pretty severe.
That is, until you realize that HSBC reported earnings of $22 billion last year. Even with the announcement of the fine, HSBC’s stock price is up about 50% for the year.
I guess $1.9 billion seems big only to folks like you and me.
Also announced was the tidbit that the U.S. Department of Justice has opted not to pursue criminal charges against anyone from the bank. The DOJ, in essence, claimed that such prosecutions may cause the demise of HSBC, which would have a ripple effect across our economy.
In other words, HSBC is too big to fail (or, in the words of another pundit, too big to jail).
Too Big To Fail was a catchphrase during the banking meltdown of 2008.
Since then, there have been no (as in zero) steps to reduce the size of any of these banking behemoths. In fact, the largest banks (those TBTF) have grown even larger in the past half decade. I suppose they’re now WTBTF (WAY Too Big to Fail).
Better yet, they’ve been able to carve out a place in society where they apparently are above the law.
If you or I were to do business with some of the players detailed in the Senate accusations against HSBC, we would be imprisoned for violations of the Patriot Act, or worse. Heck, a charge of treason wouldn’t be out of the question.
Oh, yeah, treason is one of those things for which they hang you by the neck.
Here is the level of absurdity at play here: Even the Arabic news agency, Al Jazeera, called the HSBC penalty a “slap on the wrist.”
Meanwhile, like lemmings, we see our freedoms eroded and our tax dollars squandered in this so-called War on Terror.
Keep in mind what HSBC has done to undermine those efforts the next time you’re at the airport, subjected to a TSA pat-down. It seems, while you and I are playing by these new rules, some banks are big enough to get away with flaunting them.