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Pin to quick picksHSBC Holdings Share News (HSBA)

Share Price Information for HSBC Holdings (HSBA)

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Share Price: 705.50
Bid: 707.20
Ask: 707.30
Change: 0.50 (0.07%)
Spread: 0.10 (0.014%)
Open: 706.50
High: 714.40
Low: 705.00
Prev. Close: 705.00
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Swiss scandal haunts HSBC's former boss Stephen Green

Tue, 10th Feb 2015 17:17

By Carmel Crimmins

DUBLIN, Feb 10 (Reuters) - The scandal at HSBC's Swissprivate banking arm is particularly awkward for former executivechairman Stephen Green.

An ordained clergyman, who has written extensively aboutmorality and banking, Green was one of the few British bankbosses to come through the financial crisis with his reputationlargely intact.

But the leaking of a vast array of detail about how HSBC'sSwiss-based private bank allegedly helped some wealthy clientsto dodge taxes has raised questions how Green apparently failedto spot serious control and compliance failings in his own backyard.

Opposition politicians in Britain are demanding a responsefrom Green who was chief executive and subsequently executivechairman when much of the alleged evasion occurred.

The scandal has put Prime Minister David Cameron on thedefensive. He made Green a trade minister in 2010 and put him inthe British upper house of parliament.

After the leak of its Swiss bank's customer list, HSBC saidon Sunday that its Swiss arm had not been fully integrated afterits purchase in 1999, allowing significantly lower standards ofcompliance and due diligence to persist.

So far, Green, 66, has declined to comment.

Cerebral and softly-spoken, Green is far removed from thebrash, wheeler-dealer image of modern-day bankers.

His first job after leaving Oxford University was in acentre for recovering alcoholics in London's East End. He thenmoved on to the British civil service and later managementconsultancy at McKinsey before joining HSBC in 1982.

Green worked his way up through the ranks and was appointedto the board of HSBC Group in 1998 with responsibility forinvestment banking, asset management and private banking. Twoyears before, Green, an ordained Anglican priest, published abook about how to serve God and Mammon.

Appointed chief executive in 2003, Green oversaw theintegration of U.S. consumer finance group HouseholdInternational, an acquisition which eventually cost the bankbillions of dollars in writedowns on its subprime mortgages.

As the scale of Household's problems emerged one majorinvestor said at the time Green had been "asleep at the wheel".

The Household deal was one of a string of acquisitionsundertaken by then chairman John Bond, who wanted to shake-upHSBC's traditionally cautious approach to banking and give it aU.S. presence to match its strong Asian and European businesses.

Bond, who later went on to chair British telecoms firmVodafone and mining group Xstrata, also oversawthe purchase of the Swiss bank at the centre of the tax storm.

Former bankers at HSBC say the bank lost its way with dealssuch as Household and Edmond Safra's Republic National Bank ofNew York and its Swiss arm in 1999, hiring people with lessdiscipline and not keeping control of what was going on in thenew corners of the organisation.

When the financial crisis struck in 2008, the billions ofpounds of taxpayer money spent bailing out British banks such asRoyal Bank of Scotland and Lloyds destroyed thereputations of many of their executives.

But Green made it through largely intact. HSBC did not needa state-funded rescue.

Chairman of HSBC from 2006 until 2010, Green also found timein 2009 to publish a book about individual responsibilityentitled 'Good Value: Reflections on Money, Morality and anUncertain World'.

When appointed trade minister in 2010, business secretaryVince Cable, a member of Cameron's junior coalition partners,the Liberal Democrats, said Green was: "One of the few to emergewith credit from the recent financial crisis, and somebody whohas set out a powerful philosophy for ethical business."

But in the years since his retirement, Green's reputation has started to come under scrutiny.

In 2012, HSBC had to pay a record $1.9 billion fine afterU.S. authorities said it had become the preferred financialinstitution for drug traffickers and money launderers between2006 and 2010, the years of Green's chairmanship. (Reporting by Carmel Crimmins. Editing by Jane Merriman)

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