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HSBC biffs government and regulators

Robert Peston | 09:43 UK time, Monday, 28 February 2011

HSBC is back to making near record profits, of not far off £12bn ($19bn) - having come through the worst banking crisis in 75 years relatively unscathed.

HSBC sign

 

The loss on debts going bad is back to where it was before the credit crunch. And this sprawling global group is profitable in every part of the world again, even the US where it was traumatised by subprime losses for three years, for the first time since 2006.

So if HSBC was one of the canaries in the coalmine in early 2007, when it was the first major bank to warn of the scale of the US subprime meltdown, some will see its 2010 profits rebound as a sign that better times for most banks will follow.

HSBC's relative strength is why, perhaps, its new chairman Doug Flint is being more aggressive than his peers at other UK banks in attacking proposals to make banks safer and pay for the sins of the past.

He claims that it is a "near impossibility" for banks to lend more to business if they are forced to lend more to governments - by buying allegedly risk-free gilts and other government bonds - as a result of new liquidity rules.

And he is sceptical that the banking system will be made more stable by proposals to force the biggest banks - what are known as Systemically Important Financial Institutions (or SIFIs) - hold more capital relative to assets as a shield against future losses.

"It is not clear that the reduced shareholder returns that would follow the imposition of incremental capital would be compensated for by improved stability", he says.

Mr Flint makes the argument which I attributed to a senior bank boss in one of my posts from Davos to the effect that singling out SIFIs for greater regulatory protection could make them even bigger - because lenders and investors would tend to discriminate in their favour even more than they currently do when deciding where to place their funds.

So if part of the problem is the concentration of the industry in the hands of a few mega banks like HSBC, Mr Flint would say that the problem would be worsened by plans to concentrate regulatory effort on making these mega banks strong enough to withstand any storm.

Although for him, I would guess, the risk of making that argument may be that it could strengthen the case of those arguing for the likes of HSBC to be broken up (Mr Flint would not be keen on a forced dismantling of HSBC).

There is also a warning shot fired across the bows of George Osborne and the government. Mr Flint complains that the new British levy on banks applies not only to the balance sheet of its UK operations but also to the liabilities of its overseas businesses: "this therefore constitutes an additional cost of basing a growing multinational banking group in the UK" he says.

HSBC's just-appointed chief executive, Stuart Gulliver, says that £250m of HSBC's estimated annual bill from the levy of £375m stems from operations outside the UK. He describes this as an "explicit incremental cost of being headquartered in the UK for any global bank".

Which will be seen as another way of saying that HSBC doesn't have to keep its HQ in the UK - although Mr Gulliver says it "hopes" to do so - if the costs of doing so become excessive. This is not the first time we have heard that kind of thing from HSBC, although that doesn't necessarily mean that possible emigration is an empty threat.

In campaigning for a reform of the levy, HSBC hopes to enlist the support of its shareholders. Mr Flint says that HSBC will increase future dividends to the extent that the government listens to its complaints and reconstructs or relieves the levy.

So that would be £250m more for investors, and £250m less for the exchequer, if HSBC were to have its way.

Update 11:00: HSBC's new chief executive, Stuart Gulliver, is receiving a bonus of £5.2m in respect of his previous role running the bank's investment banking operations, on top of salary, allowances and benefits in kind totalling £971,000.

He has chosen to take all of it in restricted shares which will only be released to him over time.

It is a lot of money. And it will upset those who see most banks as part of the economic problem, rather than part of the solution.

That said, HSBC is one of the world's very biggest businesses - with a market value of £126bn, greater than the combined value of Barclays, Lloyds and RBS.

And in a US context, Mr Gulliver's £6m or so is not huge bucks.

Also, HSBC was a very rare bank that did not need bailing out by taxpayers in the great crash of 2008.

If there is an issue about Mr Gulliver's bonus it is probably about levels of pay in the banking industry in general - and whether bankers' remuneration is excessive in the sense that banks' profits have for years been inflated by a series of unsustainable or socially valueless practices (which is an argument that the chairman of the Financial Services Authority advances from time to time).

Comments

Page 1 of 3

  • Comment number 1.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 2.

    From the BBC website re HSBC profits:

    "HSBC did cut its return on equity target, a measure of profitability, citing tougher capital requirement regulations.

    "Overall, it's a good set of numbers but on the net income figure, they came in a little shy on what analysts were expecting. The return on equity target is also a little light," said Ion-Marc Valahu, a fund manager at ClairInvest."

    Hmmm, so maybe not soo good then. I'm guessing this is the important bit from RP's blog

    "The loss on debts going bad is back to where it was before the credit crunch."

    I think interest rate rises, higher inflation and the quote from RP below may slow things down a little:

    "He claims that it is a "near impossibility" for banks to lend more to business if they are forced to lend more to governments - by buying allegedly risk-free gilts and other government bonds - as a result of new liquidity rules."

    The first hint of sovereign debt exposure I've heard fo for a while. Maybe this will become news again shortly seeing as the Euro leaders seem in something of a hurry to finalise sovereign funding solutions in March with several meetings planned.

  • Comment number 3.

    Not many 'bleeding hearts' for shareholders when it comes to multi-billion pound bonus pool. No surprise that bankers do not want the levy - turkeys voting for Christmas! Of course their perception of measures to make the banks more secure and stable will have undesirable unintended consequences. Clearly the bible according to St HSBC is that without any detectable intrusive regulation we exist in the best possible of all finance worlds. Time to call bluffs. In the long term it is in the interest of the wider economy to reduce to influence of finance capital in the UK. Our regulation should be aimed at increasing competition in this area and one effective way is to withdraw underwriting deposits for those banks that do not fall in line. Another is to retain substantial public ownership element in some of our large banking enterprises.

  • Comment number 4.

    Well I never!

    We will leave!
    Now we will pay higher dividends to stop the Government having it!

    What a dictator! I’m god and I am in control. If this isn’t the proverbial red flag to a bull then I do not know what is?

    This man wants a confrontation because he knows he will win, he as the upper ground and he’s showing it; The UK government and it’s people are powerless to stop him.

    Give up folks and accept your role in this serfdom – you work for his benefit!

  • Comment number 5.

    Much as I hate the big banks, can some of you direct your vitriol to both the BIG4 (remember it was 5 till recently), and the solicitors. And the big MNC "valuers" surely deserve some stick to for not better flagging up the obviously enormous house price (and commercial) bubbles. They are equally complicit as the lenders per se. I think MNCs should pay more than entrepreneurs to better develop a balanced economy. And the big food retailers also either need to broken up or pay higher tax than independents. Surely that is fair and equitable?

  • Comment number 6.

    I've not heard the argument that the new regulation is a barrier to entry for any new bank wishing to go global, but it's s valid point.

    To those who wish to break up HSBC, don't, they are a flag bearer to the uk economy and doing a better job than BP and BA.
    Would Washington try and break up citi or BOA?

  • Comment number 7.

    Surely what differentiates HSBC from, say, Northern Rock, RBS or the former HBoS, is its much more successful approach to spreading risks across different countries and industry sectors? For example, HSBC did not put all its eggs into speculative property developments in just one country. Both markets and governments should be looking to penalise excessive risk-taking rather than simply the size or the home country of the institution concerned.

    I am more worried that there looks to be less and less competition between financial institutions. For example, if I transfer money electronically across currencies, eg buying goods in the US or in Euroland with a sterling account I am charged many tens of pounds in fees or in poor exchange rates when the cost of the electronic transaction to the bank(s) concerned can only be in pennies. And no bank or credit card company looks to offer a service based upon charging pennies rather than multiple pounds - competition is simply not working!

    It is time we started with regulation being based upon the needs of the customer with banks' charges being regulated based upon the costs of what they do!

  • Comment number 8.

    The credit crunch proved that the UK economy cannot afford to have banks of the size of HSBC based here. Please stop rattling your saber Mr. Flint and get yourself off to China. At least they will be able to afford your next catastrophy. In addition Barclays has just proven how little multinationals contribute in tax anyaway.

  • Comment number 9.

    We all like to think of dear-old HSBC as British.
    But its worldwide operations are probably bigger than the UK government.
    The name HSBC suggests that there is one possible big "spanner" in the HSBC works.....political upheaval in China.
    Let's hope that doesn't happen, or happens gently and slowly.
    HSBC.....good bank.....far more alert than some other "dozing" British financial institutions.

  • Comment number 10.

    http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=4075596

    "The UK tax take is even higher, at $5.33bn, up from $1.98bn in 2010."

    From the article.

    This is why we want HSBC to stick around. If GO presses ahead with the bank levy we could lose billions in tax revenue in the pursuit of a few hundred million.

  • Comment number 11.

    It seems obvious to me that the multi billion pound HSBC should be replaced by a credit union run by volunteers. Every sign up would get a free fountain pen but only if they deposit at least one pound.

  • Comment number 12.

    5. At 10:48am on 28th Feb 2011, Tony Saigon wrote:
    And the big food retailers also either need to broken up or pay higher tax than independents.

    - They do pay more tax. Massive number multiplied by percentage is greater than tiny number multiplied by lower percentage (or even the same percentage).

  • Comment number 13.

    It would be much better if these banks were all closed down or nationalised. Then the money going to the Treasury to be spent on health, education, welfare benefits would dry up. Then the Pestons and the rest of the left would really have something to whinge about.

  • Comment number 14.

    Does seem odd that trade unions are accused of holding people to ransome blackmailing the country if the go on strike but banks just seem to do what they want - shot across the bows seems rather mild - it does seem to be a threat to what is after all a democracy

    Why did Karl Marx only drink herbal tea ?
    Because all propert tea is theft - boom boom.

  • Comment number 15.

    13. We should all live in the USSR too. Right?

  • Comment number 16.

    8. At 11:02am on 28th Feb 2011, frisbeex wrote:

    The credit crunch proved that the UK economy cannot afford to have banks of the size of HSBC based here. Please stop rattling your saber Mr. Flint and get yourself off to China. At least they will be able to afford your next catastrophy. In addition Barclays has just proven how little multinationals contribute in tax anyaway.

    --------------------------------------------------------------------------------

    Maybe I'm being naive, but I'm puzzled as to how HSBC being based, say, in Hong Kong instead of London would insulate the UK Economy from a repeat Credit Crunch? Just because they move Head Office offshore wouldn't mean that they stop doing business in the UK - there would be the same level of loans and deposits to UK citizens, and the same volume of any non-retail activity (ie commerical and investment banking). All it would mean is that the "little contribution of tax", as you called it, or $5bn+, as Max has highlighted above, would reduce.

    If I'm missing the point of your comment, I apologise.

  • Comment number 17.

    Why should any corporation ever be in a position to "fire a warning shot" over any democratically elected national government's bows?

  • Comment number 18.


    So what do we do about having a bank that works with Govt and industry to broaden and rebalance the economy because this lot obviously aren't going to.

  • Comment number 19.

    HSBC only survived the banking crisis because of various governments intervention at the time, if the banks had been allowed to fail then I suspect HSBC would have gone west with the rest of them.

    Using the same arguments that brought the banking systems down (dodgy loans) is still valid now as here in the UK the housing sector bubble is yet to be fully deflated by some margin, I submit, so to take the view that we are back to levels pre the credit crunch would appear to me to be slightly overoptimistic.

    I wonder what HSBC results would have been had they not taken this view and what their exposure is to this market worldwide.

  • Comment number 20.

    Its a good set of results for HSBC, and frankly we should do what we can to keep them based here, they provide a lot of jobs and tax revenue to the economy, while only a small percentage of their business is actually here.

    HSBC was not overly reliant on the US sub prime market, unlike other firms here, and its far east presence has allowed it to remain very strong throughout the recession, so I guess the chief exec does deserve a sizeable bonus.

    As for those that talk seriously of nationalising banks permanently, get real, public ownership does not work in the long term.

  • Comment number 21.

    I would not be shocked by a bank having both "Hong Kong" and "Shanghai" in its name being headquartered elsewhere than in London. Besides, the Chinese have interesting ways to deal with economic malfeasance.

  • Comment number 22.

    11

    What a good idea, have you seen what CU's do in the States or Australia or Canada, perhaps your vision is restricted by all those mountains in Switerland?
    Or perhaps your head is stuck somewhere else?

  • Comment number 23.

    "singling out SIFIs for greater regulatory protection could make them even bigger - because lenders and investors would tend to discriminate in their favour even more than they currently do when deciding where to place their funds."

    That doesn't follow. Given that the customer would likely see a downside to the extra security in the form of lower returns/higher interest on loans, this would be a consumer trade-off. If a "safer bet" is what the market demands, it would be a successful strategy for all institutions. The smaller banks are at liberty to take-up the same level of (self-imposed) regulations if this is perceived to be in such demand.

  • Comment number 24.

    They don't pay anything in tax, they've wrecked the economy, they've got the feckless and stupid up to their eyeballs in debt - what do these banks actually DO that makes them so important to us??

    Kick them out and bring back industry, a solid foundation for an economy that benefits the entire country not just a corrupt rich elite. Failing that the people need to take back our democracy by taking to the streets.

  • Comment number 25.

    20. At 11:37am on 28th Feb 2011, mr ff wrote:

    As for those that talk seriously of nationalising banks permanently, get real, public ownership does not work in the long term.

    ---------------------------------------------------------------------------------

    Says who?

  • Comment number 26.

    I am so relieved that HSBC are so comfortably solvent after all. I was so worried that my overdraft fees were not going to be enough for them.

  • Comment number 27.

    #25

    Both theory and history, its just inefficient.

  • Comment number 28.

    I have said it before and I will say it again , the retail banks need to be split (Not necessarily physically) from the merchant banks.

    Only the retail part of the business should receive government assurances , if required the merchant bank element should be allowed to fail or bought cheap ,as Barclays did.

    Only when the merchant bank businesses are borrowing money at a rate that includes RISK, will the taxpayer be safe from ANOTHER bigger bailout in th future.

    Although HSBC are without doubt stronger than other UK banks at the moment , they have without doubt benefited from the UK taxpayer guarantee. However if the property bubble in China was to collapse, they could be another HBOS??

  • Comment number 29.

    #16. At 11:18am on 28th Feb 2011, north_view wrote:

    "Maybe I'm being naive, but I'm puzzled as to how HSBC being based, say, in Hong Kong instead of London would insulate the UK Economy from a repeat Credit Crunch?"

    -----------------------------------------------------------------------------------

    The only way the banks could absolve themselves of the UK would be to collectively package every Uk owned financial product in a whopping great derivative and flog it to the highest bidder. Problem is most of it has probably been packaged and sold a dozen times already so we're stuck with them and they're stuck with us contract wise. All hot air, besides who'd abandon all us credit hungry Brits.

  • Comment number 30.

    25. At 11:50am on 28th Feb 2011, NorthSeaHalibut wrote:

    20. At 11:37am on 28th Feb 2011, mr ff wrote:

    As for those that talk seriously of nationalising banks permanently, get real, public ownership does not work in the long term.

    ---------------------------------------------------------------------------------

    Says who?


    ------------------------------------------------------------------------------

    While I appreciate that you have a vested interest in CU's, which is understandable, and while a nationalised Credit Union approach may ultimately be the ideal solution, certainly from a customer standpoint, there remains a fairly major stumbling block to the tired "boot them out, nationalise the lot of them" rallying cry.

    All of the major players have shareholders, who would need to be bought out by the govt in order to nationalise them. I wouldn't even like to think what the collective figure of their shareholding is in £ terms, but I would suspect that it makes the current government stake in the industry look fairly low by comparison.

    In order to then recoup that investment, the customer rates in the new nationalised bank would need to be higher than they otherwise might be. Or indeed, they currently are with the current banking model. So who wins from that scenario? Certainly not the customer.

  • Comment number 31.

    Flint is right in much of what he says. Forcing the banks to increase their capital to offset future risk to the taxpayer is a false measure that will polarise investment into SIFI protected organisations, and thus reduce credible choice for the customer. It's the big institutions that could make the difference, but they will invariably choose the safe 'taxpayer protected' path.

    What would probably work better is if the Bank of England had opened its coffers in competition with the high street clearing and investment banks, to offer loans to small businesses at highly competitive rates of interest. That would have provided incentive for the high street banks to follow suit or lose long term profit potential. It would also have opened up the lending market in a way that reduced risk for the taxpayer, since they would only have to cover a single risk as opposed to covering the risk of both the business and the bank.

    This kind of thing is, though, highly unlikely to ever happen, simply because it would fly in the face of Tory ideology, by appearing a bit too much like a nationalisation of a lending bank.

    Pity the Lib Dems are not asserting themselves enough in the process.

  • Comment number 32.

    24. At 11:41am on 28th Feb 2011, SleepingSpurs wrote:

    "..................they've got the feckless and stupid up to their eyeballs in debt -
    what do these banks actually DO that makes them so important to us??................"

    ---------------------------------------------------------------------------------

    Your first line has answered your second line.

  • Comment number 33.

    "Maybe I'm being naive, but I'm puzzled as to how HSBC being based, say, in Hong Kong instead of London would insulate the UK Economy from a repeat Credit Crunch?"

    Because being based in the UK means that if it goes bust next time around, which would likely be larger than the bailout last time around, just for them.

    I seem to remember that in 2006 the UK would have been qualified as a "banana republic", if financial services/banking counted (well over 10% of GDP in a single industry). There is a reason all those countries that used to produce one export (for example coffee or actual bananas) were recommended by the IMF and others to diversify, and the same applies to the UK - too many eggs in one basket, and Iceland is a particularly good example of why that is bad.

  • Comment number 34.

    Would moving their head office make much of a difference? The majority of the $5.3bn tax paid in the UK was PAYE & NI, not corporation tax. All of the employment tax would still be paid if they move. The change of tax rules meaning overseas profits will not be taxed in the UK means there is no loss by them moving HQ. UK profits will be taxed in the UK regardless of where they are HQ'd. In this respect, I don't care if they move.

    HSBC faired better than most due to its scale and the fact it is spread so far across the globe. The ones that needed help were too focussed on the UK; this is not limited to banks. Any business focussed on a single market will suffer when that market takes a downturn. Simple.
    I am no fan of HSBC, but they do seem to be making an unfairly large contribution in comparison to other banks when they did not receive (direct) Gvt support. It is the cost of this support that the levy should be covering.

  • Comment number 35.

    Why do all these comments need moderating anyway, we're only talking about the economy, what could we possibly say to upset anybody.

    Kind of kills a forum when you have to wait 10mins to see your post.

  • Comment number 36.

    22. At 11:38am on 28th Feb 2011, creditunionhero wrote:
    11

    What a good idea, have you seen what CU's do in the States or Australia or Canada, perhaps your vision is restricted by all those mountains in Switerland?
    Or perhaps your head is stuck somewhere else?

    - CU's? Do you mean C U Jimmy? I love Russ Abbott!
    When you say the States do you mean of America or Australia, Nigeria, Brazil etc. or physically - gas, solid, liquid?

    Switerland? Without the "z" it sounds like you are zaying it in ze German accent! Besides my vision of USA, Australia and Canada isn't restricted by mountains but rather by the fact that they are a very long way away.

  • Comment number 37.

    There is a conundrum in all this. Most people are paying down debt and appear to be distancing themselves from further credit, however the few that still seek it can't get it because the banks see risks ahead. The capital risk assessments undertaken by underwriters has nothing to do with today and lots to do with tomorrow whereas previously it was all about today.

    The ECB and European leaders are in a hurry to settle agreements on further central funding, I wonder why?

  • Comment number 38.

    I would argue paying over 5 BILLION in tax means they contribute a tad more than the football club thats your namesake and its players do SleepingSpurs..

    We can't bring back industry, we are utterly uncompetitive as UK workers (relatively), are overpaid, work fewer hours and are less educated than their global rivals.. quite simply its far far cheaper to make something thousands of miles away and ship it here..
    You would need to bring back protectionism and break ties with the EU, neither of which are likely

    As for taking to the streets - I'd actually like to understand - to achieve what ??
    Are you proposing an alternative government or transfer of power as in NA and the Middle East ? Will your protests continue until the government break up all the globally listed banks based in the UK and force them overseas ? Surely a protest needs a stated aim or goal - with that clearly stated ?

    I'm asking this as I was confused by some twenty somethings in Islington on Saturday morning who were attempting to 'wash RBS clean' or similar with buckets of soap and water.. co-incidentally at the same time some passing press just happened to be there. I was within 20 feet and have absolutely no clue what those people want to happen other than annoy people trying to use the cash machines and actually enter the bank

  • Comment number 39.

    20. At 11:37am on 28th Feb 2011, mr ff wrote:
    =========================================

    Wrong on all counts.

    "Its a good set of results for HSBC, and frankly we should do what we can to keep them based here, they provide a lot of jobs and tax revenue to the economy, while only a small percentage of their business is actually here."

    Vast majority of jobs and taxes in the UK come from the former Midland Bank business. Do you expect them to relocate 2,000 branches and 80,000 staff to HK?

    "HSBC was not overly reliant on the US sub prime market, unlike other firms here, and its far east presence has allowed it to remain very strong throughout the recession, so I guess the chief exec does deserve a sizeable bonus."

    HSBC probably had the highest exposure of all UK banks to US subprime through its unfortunate purchase of Household Insurance.

    http://news.bbc.co.uk/1/hi/business/2471827.stm

    http://www.bbc.co.uk/blogs/thereporters/robertpeston/2007/02/hsbc_us_troubles.html

    "As for those that talk seriously of nationalising banks permanently, get real, public ownership does not work in the long term."

    And private ownership of vital services works well doesn't it?

  • Comment number 40.

    The sooner the depositors guarantee and supply of cheap money is removed the better, the banks making profits like this is all well and good but they are still just a service and the more profit they make ,the less other people have to aid their recovery.

    We have to get to the point where if banks fail they fail no bailouts, no guarantees any other regulation is doomed to failure and will be abused.

    As for them moving i find it an empty and hollow threat, they and all the others need this country and access to Europe, it would be better if we could see just their figures for the UK but as Barclays have shown the headline figures that are given out bear no resemblance to the actual amounts we supposedly benefit by.

  • Comment number 41.

    Definition: Par-a-site

    1. an organism that lives on or in an organism of another species, known as the host, from the body of which it obtains nutriment.

    2. a person who receives support, advantage, or the like, from another or others without giving any useful or proper return, as one who lives on the hospitality of others.

  • Comment number 42.

    30. At 11:59am on 28th Feb 2011, north_view wrote:

    "All of the major players have shareholders, who would need to be bought out by the govt in order to nationalise them. I wouldn't even like to think what the collective figure of their shareholding is in £ terms, but I would suspect that it makes the current government stake in the industry look fairly low by comparison.

    In order to then recoup that investment, the customer rates in the new nationalised bank would need to be higher than they otherwise might be. Or indeed, they currently are with the current banking model. So who wins from that scenario? Certainly not the customer."

    --------------------------------------------------------------------------------

    The value of shares may go up as well as DOWN. How about we nationalise at £0.01 or even zilch. For the good of the state you must be prepared to make sacrifices, after all isn't that what we're being asked to do now.

    Never invest money you can't afford to lose, the failure to bailout RBS and Lloyds/HBOS would have left their values at zero, there is no divine right for shares to hold any value, you pays yer money you takes the risk. Popular hell no, but then neither is the alternative is it.

  • Comment number 43.

    In the interest of good public relations can HSBC management issue the amount of corporation tax paid to the UK , or will they have to be dragged to the House of Commons first....

    Or is it 50p like Barclays....

  • Comment number 44.

    38. At 12:06pm on 28th Feb 2011, J wrote:

    #I'm asking this as I was confused by some twenty somethings in Islington on Saturday morning who were attempting to 'wash RBS clean' or similar with buckets of soap and water.. co-incidentally at the same time some passing press just happened to be there. I was within 20 feet and have absolutely no clue what those people want to happen other than annoy people trying to use the cash machines and actually enter the bank

    -----------------------------------------------------------------------------------

    Uncanny trend of answering our own questions on here this morning.

  • Comment number 45.

    42. At 12:19pm on 28th Feb 2011, NorthSeaHalibut wrote:

    The value of shares may go up as well as DOWN. How about we nationalise at £0.01 or even zilch. For the good of the state you must be prepared to make sacrifices, after all isn't that what we're being asked to do now.

    ===========================================================

    are you asking shareholders to essentially "give" their holdings to the government in order to nationalise them??

  • Comment number 46.

    38. At 12:06pm on 28th Feb 2011, J wrote:

    "We can't bring back industry, we are utterly uncompetitive as UK workers (relatively), are overpaid, work fewer hours and are less educated than their global rivals.. quite simply its far far cheaper to make something thousands of miles away and ship it here.."
    So lets all work for nothing to be competive then. I thought slavery was illegal.



    "As for taking to the streets - I'd actually like to understand - to achieve what ??
    Are you proposing an alternative government or transfer of power as in NA and the Middle East ? Will your protests continue until the government break up all the globally listed banks based in the UK and force them overseas ? Surely a protest needs a stated aim or goal - with that clearly stated ?"

    To take away the right of private banks to create our medium of exchange and effectively lease it back to us at interest, would be a good starting point. To readdress the over accumulation of wealth, that is enrichening the rich and impoverishing everyone else, would be the next step.

    In case you haven't noticed the revolutions started because inflation of commodities had risen to a level whaer people could not longer afford to feed themselves. The only option they have is to throw out their governments. The inflation is being caused by the quantative easing of the dollar (printing money) in the states 24 7. There is no sign of this stopping so we will face the same issues as Egypt etc in due course, it will just take a little longer because incomes are higher here. Do you really think people will lie down and expect it? "When people loose everything, and have nothing left to loose, they loose it" Gerald Celente

  • Comment number 47.

    Dont expect "patriotism" from senior bankers.
    Money talks far louder than patriotism....it always has.
    We've heard many "veiled threats" from banks to relocate if they dont like the terms.
    That's nothing new......the wealthy have always "debunked" with their money for tax purposes.
    But the "rich-poor gap" is now "uncomfortable" even for Western governments.
    The people of the Middle East dont like it, that is obvious.
    Our situation is inter-twined with Washington and Wall St.....only the American public can change "Capitalisms terms and conditions".
    The "rich-of-rich" have emerged co-incidentally at the same time that the power of trade unions has diminished.
    Perhaps trade unions will head our "revolution"....but no-one wants to re-visit the chaos of the militant 1970s.
    But HSBC is somewhat different from all the rest.....it was a giant bank before it ever got involved in the UK.

  • Comment number 48.

    Thank you Mr Peston, for your contribution on behalf of Mr Gulliver's and HSBC's PR department!

  • Comment number 49.

    I would argue paying over 5 BILLION in tax means they contribute a tad more than the football club thats your namesake and its players do SleepingSpurs..
    ------------------
    And what percentage of their profits is that?

    Footballers (and for that matter all the other wealthy British tax thieves) who steal from the British taxpayer should have their passports terminated and be deported to the tax haven they prefer to fund and barred from entering the UK for life. That would sort out the bulk of that particular problem overnight.

    But of course the Liblabcon criminals are meer puppets of the rich and wealthy so would never dream of doing such a thing. They never lift a finger to deal with tax dodgers, yet a single mum who earns 50 quid down the pub cash-in-hand they'd be all over them like a tramp on chips. One rule for the rich thieving corrupt aristocraticy another for the peasants.

    Moving onto the other point, taking to the streets would solve far more than just sitting on our hands and taking shafting after shafting from the bankers and their paid-up puppets in government would.

  • Comment number 50.

    42. At 12:19pm on 28th Feb 2011, NorthSeaHalibut wrote:
    30. At 11:59am on 28th Feb 2011, north_view wrote:


    The value of shares may go up as well as DOWN. How about we nationalise at £0.01 or even zilch. For the good of the state you must be prepared to make sacrifices, after all isn't that what we're being asked to do now.

    Never invest money you can't afford to lose, the failure to bailout RBS and Lloyds/HBOS would have left their values at zero, there is no divine right for shares to hold any value, you pays yer money you takes the risk. Popular hell no, but then neither is the alternative is it.

    --------------------------------------------------------------------------------

    That'll be a crumb of comfort to all those whose pension fund has been partially invested in the banks then, via their fund managers.

    "Dear Sir/Madam, your fund has been reduced by x% due to the shareholdings we had in the financial sector being revalued at £0.00. Never mind, you pays yer money you takes the risk"

    I look forward to receiving the letter soon...

  • Comment number 51.

    37. At 12:06pm on 28th Feb 2011, NorthSeaHalibut wrote:
    There is a conundrum in all this. Most people are paying down debt and appear to be distancing themselves from further credit, however the few that still seek it can't get it because the banks see risks ahead. The capital risk assessments undertaken by underwriters has nothing to do with today and lots to do with tomorrow whereas previously it was all about today.

    The ECB and European leaders are in a hurry to settle agreements on further central funding, I wonder why?

    ..............
    What about the £250billion the banks have to repay the government this year? Its all a pack of cards waiting to collapse. Still looking forward to reading your proposals by the way.

  • Comment number 52.

    What a pity that Fred Goodwin didn't attend the school of HSBC ... be international - but make sure you take in, and hold, more REAL money/capital than you speculate?

  • Comment number 53.

    @Sleeping Spurs, 24. "They don't pay anything in tax" - HSBC paid £1.2billion in UK taxes last year, up from £879m the previous year. That's hardly "not paying anything" is it? Take another £1.2bn out of the UK economy, plus the taxes HSBC's employees all pay on their income, and see how many more cuts the Government would have to make!

    "what do these banks actually DO that makes them so important to us??" - they all you to pay for things in shops or online via debit card, so no need to carry cash around. They pay all your bills for you via the Direct Debit system. They allow you to receive your salary securely rather than having to pick up hundreds or thousands of pounds in cash every month. Oh, and where exactly would you go for a mortgage if banks didn't exist? You all hate the banks, but when you want to borrow £250,000 for a house, they're your best friend. How else would anyone buy a home?

    You might not like the profits or the bonuses, but you can't say the banks do "nothing" for you or the country, that's just nonsense - they pay billions of pounds in tax every year, employ tens of thousands of people, and provide you with useful services such as mortgages and Direct Debits that you couldn't get without them.

  • Comment number 54.

    Can't wait for that global destructor to hit! Surely this will put paid to the GREED for GOLD brigades once and for all! Yes I know its would also spell the end for billions of innocents, a price I'm prepared to pay!

  • Comment number 55.

    Now how much of that GBP 12 billion will find its way into the Teasury money pot?

    One hopes it is substantial as the Treasury is being shortchanged by all the other banks who have been happy to ensure their write-downs are substantial.

    Now we must all agree that HSBC was not as stupid as the other banks during the boom. They generally focussed on sound business which is to their credit and why they survived. Although I believe they did take a hit in the US for trying to diversify their portfolio into rubbish at the top of the boom, but they managed like any good business to roll with that punch.

    In my view HSBC would have survived a full market crash as the the last man standing so my attitude to them is a bit respectful as I feel they don't have both hands in my pockets, unlike their competitors.

    The days of the mega-bank have to be numbered as these too-big-to-fail entities are distorting our economy to breaking point. The banks need to be split between retail and investment with the taxpayer guaranteeing the retail banks and nothing else. If this means that HSBC goes back to China or should I say Hong Kong - one country, two systems - then I wish the Chinese all the joy of it as I just don't want the liabilities involved.

    The government now needs the courage to see this issue through. It has to be seen as the necessary first step in liberating the UK economy from the moneychangers in the Temple of Mammon. It may well mean that the UK economy will have to shrink as a consequence of a mad, bad boom but it is the only way to get things right once more and return to economic realities where up is the opposite of down.

    To coin a phrase, there is no alternative.

  • Comment number 56.

    Like many others no doubt, I dont truly understand who investment banks lose money to, or make money from. I have worked out that deposits, however meagre, with a retail bank provides capital which can be used to leverage much more credit for the investment banking arm to trade with.
    Why wait for the governments not to split the big banks ? Move your accounts to a provider that is not funding an investment arm. You can get all the common facilities an individual needs, in the age of online banking. Your 'capital' will be used to support mortgages and retail lending, which we want. You wont be funding such offensive salaries either.
    Individual action can take away the big banks smarties.....every little bit helps... and if they do fail again the government wont have to consider the cost of your guaranteed deposit in the bail out decision.

  • Comment number 57.

    45. At 12:31pm on 28th Feb 2011, avalanche_invesmtents wrote:

    are you asking shareholders to essentially "give" their holdings to the government in order to nationalise them??
    -------------------------------------------------------------------------------

    Yep. Well it wouldn't be a case of asking really.

    A bit like what the government are asking us to do now but in reverse so why the shock. Lose millions of jobs, incomes, lifestyles, homes etc or lose a few million shares by people who can afford to lose them. No brainer for me.

    Before you cry "Penisons" - proper state provision is the answer. I don't want to turn this into a political bebate so soon, we usually get to blog 100(ish) for that so I'll leave this until later.

  • Comment number 58.

    50. At 12:42pm on 28th Feb 2011, north_view wrote:
    That'll be a crumb of comfort to all those whose pension fund has been partially invested in the banks then, via their fund managers.

    "Dear Sir/Madam, your fund has been reduced by x% due to the shareholdings we had in the financial sector being revalued at £0.00. Never mind, you pays yer money you takes the risk"

    I look forward to receiving the letter soon...

    ---------------------------------------------------------------------------------

    I wish I'd put a bet on that - see my post #57

  • Comment number 59.

    It would be interesting to compare the banks total bonuses with profits. I'll leave others to do that but, expressed as a percentage, it will be peanuts and just a distraction.
    HSBC did benefit from the bail-out though only by association. They need to be careful about putting up 2 fingers to the government.
    The threat of leaving the UK is real, not for nothing are they Hong Kong and Shanghai Banking Corporation. They came out of Hong Kong due to worries about China. The point about China's instability mentioned above is well made. Stability is the main advantage which the UK and USA have. Any country which cannot stand criticism is inherently unstable. This stability is worth quite a lot, there could well be a shareholder revolt if they were serious about a move.

  • Comment number 60.

    Mr Flint is right to say that singling out SIFIs for special regulation is wrong. Customers have the right to expect all banks, large or small, to take proper care of their money, and will shy away from less well regulated banks.

    Ordinary retail depositors expect their money to completely safe and if it is deposited in a current or instant access account to be always withdrawable. The trades description act should apply so that customers get exactly what they expect. This requires that no bank or retail deposit taker should fail, at least in the sense that it becomes unable to repay its current and instant account depositors on demand, even if it is not "too large to fail".

    The implication of this principle, is that all instantly withdrawable funds should always be covered by liquid assets such as deposits at the BoE .

    There is no reason to prevent banks taking deposits in special savings accounts and using them, along with funds, for risky lending, but depositors should be given full information, so that they, or their advisers, can access the risk. In short, these accounts should be subject to the essentially the same regulations as apply to publicly quoted equities.

    Additional regulation would, in my opinion, not be necessary.

  • Comment number 61.

    Let the banks have their way but introduce legislation that says the next time a bank fails, the directors will be put on trial for state treason.

    To use the banks methods of you hurt us we will hurt you and leave the country, well 2 can play at that game.

  • Comment number 62.

    #51. At 12:44pm on 28th Feb 2011, Averagejoe wrote:

    "Still looking forward to reading your proposals by the way."

    -------------------------------------------------------------------------------

    They're progressing at a rate fo knots now, we'redetermined to get something up and running just in case opportunity arrives sooner than later. Hopefully have a website I can point you at in late Spring/Summer. None of us appear to be web developers so it'll be fairly basic until we can get someone on board with some know how. Nothing flashy required obviously, that would be contradictory :-)

    As for the bank repayments, I'm sure this is what most of the talking is about, I smell restructuring in the air, providing they can afford to defer, big question that one.

  • Comment number 63.

    57. At 12:52pm on 28th Feb 2011, NorthSeaHalibut wrote:
    45. At 12:31pm on 28th Feb 2011, avalanche_invesmtents wrote:

    are you asking shareholders to essentially "give" their holdings to the government in order to nationalise them??
    -------------------------------------------------------------------------------

    Yep. Well it wouldn't be a case of asking really.

    A bit like what the government are asking us to do now but in reverse


    ===========================================================

    hmmm so rather than cutting jobs and funding for benefits your saying that the government should directly take away shareholders capital. thats hardly going to be a popular idea .....

    and what about foreign investors, should they be forced to give their holdings to the UK government. that wouldnt create any political tensions between countries

  • Comment number 64.

    #53. At 12:47pm on 28th Feb 2011, LeedsPilgrim wrote:

    "...........and provide you with useful services such as mortgages and Direct Debits that you couldn't get without them."

    ------------------------------------------------------------------------------

    I'm indebted to them, no really I am!

  • Comment number 65.

    Big Banks Q&A:

    1. May we break you up to help mitigate risk? No
    2. OK, may we apply a levy on the biggest banks to help mitigate risk? No
    3. OK, may we apply high tax rates to bonuses to stop short termism and help mitigate risks? No
    4. As part of a large, complex financial system, do you accept any responsibility for the global financial crisis? No, unless it was a bailed out bank. Then the answer is...No.
    5. Is fractional reserving a completely discredited method leading to systemic risk in the system? No
    6. Was there anything wrong with 1980s deregulation, Basel 1, Basel 2? No
    7. Do you feel any responsibility towards anyone other than our shareholders? No (condascending look at such an idiotic question)
    8. Your answers to questions 1 through 7 - are you having a laugh? No
    8. Is it time to stop banker bashing? No, oops, I mean yes.

    Funny that. Except its not.

  • Comment number 66.

    Ever-larger banks must be the inevitable result of a focus on capital hoarding for safety reasons which not only reduces price competition but risks putting our remaining eggs in even fewer baskets…

    I feel pretty sure that if allowed an entirely free hand by his PR people the boss of HSBC would also point to the lunacy of retail customers demanding interest on their accounts at the same time that they demand 100% safety for their deposits. The two states are mutually exclusive as earning interest of course requires risk taking but that does not stop governments being forced by their voters to try and square that circle.

    Personally I take much amusement from watching those like Vince Cable contort arguments to try and force more credit and more safety at the same time!

  • Comment number 67.

    Yet another fat cat with a big bonus thumbing his nose at the rest of us whilst we have to pay for the clear up of the mess the banks made.

    Lets face it, the banks effctively bought bags which they were told were full of gold. But they turned out to be full of rubbish. HSBC were part of this, but because of their size didn't need direct hand outs but they still benefitted from indirect government support.

    What a pity the government didn't let one of the big banks fail!!! Then the boot might have been on the other foot!!! We might have seen some contrition and humility from the banks instead of the macho posturing we now have!!!

    On the subject of bonuses, what part of motivation theory suggests that someone earning nearly £1m needs to have a bonus of £5.2m? If I were a shareholder of HSBC, I would be expecting Mr Gulliver to be giving his all for the enormous salary he gets without the need for a bonus. That salary is more in a year than the average person would earn in a life time. This myth of needing to pay huge salaries and bonuses is a myth perpetrated on us for years by the bankers. And who does it benefit? The bankers. It sure doesn't benefit the rest of us.

    The bankers are living in a world of mega salaries and bonuses completely divorced from reality. The sooner that they are brought back down to earth the better!!!

  • Comment number 68.

    "they all you to pay for things in shops or online via debit card, so no need to carry cash around. They pay all your bills for you via the Direct Debit system. They allow you to receive your salary securely rather than having to pick up hundreds or thousands of pounds in cash every month. Oh, and where exactly would you go for a mortgage if banks didn't exist? You all hate the banks, but when you want to borrow £250,000 for a house, they're your best friend. How else would anyone buy a home?"

    These are all simple services that the state could offer, with the profits going back into the country. Casino banking, which is basically just a more complex form of gambling, could then be run privately and if they go bust they don't take the whole country down with them.

    At the moment they make money they get rich, if they lose money they get rich, but at our expense! That cannot be right and people are finally ready to stand up to it.

  • Comment number 69.

    My pension fund relies in small part on its shares in HSBC - as I imagine many others do too.
    I note that HSBC used to be called the 'Hong Kong and Shanghai Banking Corporation' and did not cost UK taxpayers any bail-outs and has only a minority share of UK banking.

  • Comment number 70.

    63. At 13:08pm on 28th Feb 2011, avalanche_invesmtents wrote:
    57. At 12:52pm on 28th Feb 2011, NorthSeaHalibut wrote:
    45. At 12:31pm on 28th Feb 2011, avalanche_invesmtents wrote:


    "hmmm so rather than cutting jobs and funding for benefits your saying that the government should directly take away shareholders capital. thats hardly going to be a popular idea ....."

    I did say it wouldn't be popular, desperate measures never are, not with everyone anyway, particularly the losers. I'm talking a hole new political and economic philosophy here not just bank bashing.

    "and what about foreign investors, should they be forced to give their holdings to the UK government. that wouldnt create any political tensions between countries"

    Happening already with corporate acquisitions by the behemoths (I like that word) so why not UK plc government? The right government that is. State tensions, they're already present just need to be managed, not easy I grant but we're doing our best to start a war now, some already have.

  • Comment number 71.

    • 39. At 12:06pm on 28th Feb 2011, Reticent_Trader wrote:
    20. At 11:37am on 28th Feb 2011, mr ff wrote:
    =========================================

    Wrong on all counts.

    "Its a good set of results for HSBC, and frankly we should do what we can to keep them based here, they provide a lot of jobs and tax revenue to the economy, while only a small percentage of their business is actually here."

    Vast majority of jobs and taxes in the UK come from the former Midland Bank business. Do you expect them to relocate 2,000 branches and 80,000 staff to HK?

    - 22.6% of PBT (page 50) relates to Europe. Ok not a small percentage but not the primary market (and this is if we take Europe to mean the UK which it doesn't).
    Similarly 76 thousand staff out of 295 thousand are based in Europe . I suppose when banks threaten to leave the UK, it's not the branch jobs (cashiers earn £15k) that are at risk but head office jobs. Head office jobs pay more than branch jobs. The tax on the large salaries is what you lose.

  • Comment number 72.

    So HSBC doubles its profits and the 'analysts' are unhappy and HSBC shares fall markedly. It occurs to me that this constant drive by 'analysts' for even larger profits may well have been a cause for the excessive risk-taking that led to the banking crisis. Where were the 'analysts' when things went belly-up? Do they have any responsibilties to government for their actions? I think not. Should they? Yes!

  • Comment number 73.

    When will everyone realise the perils of our current monetary system? Despite the potential for short term returns to profit and the relative success of certain banks, we are having the wool pulled over our eyes if we think we are able to achieve real, long term economic stability.

    We are in more debt as a nation than ever before, and for the banks to continue to prosper, they need us to plunge even further into the debt trap. With every passing year, wealth is becoming more centralised and will continue to do so until people are left starving in the streets. Sounds a bit extreme? Look at what's happened to Greece if you want a sneak peek at where we could be heading. Their pact with the devil (a.k.a Goldman Sachs) has decimated any chance of economic prosperity in the foreseeable future.

    In this thread, I noticed that 13. held similar views to my own, but was immediately scorned by 15. Now, you may wish to shoot me down as a 'loony lefty', but I can't see how the nationalisation of the banking industry could be worse than our current predicament. For a start, we could stop being eternally focused on the necessity for exponential economic growth as a means to repaying a debt to the banks (especially as that debt was based on absolutely nothing of any real value in the first place!).

    In short we are a productive, resource rich and technogically forward thinking nation of people. Why in heavens are we continuing to line the pockets of a select few while the rest of us struggle by?

    This says it all for me:

    "Permit me to issue and control the money of a nation, and I care not who makes its laws".
    Mayer Amschel Rothschild


  • Comment number 74.

    53

    banks have a habit of including their employees income tax in their (tax paid figures).
    This is disengenious, it is their employess that pay this not the business.

  • Comment number 75.

    How dare a bank threaten an elected (well almost) government, call their bluff and nationalise them for no re-embursment to the shareholders (who are all big corporations anyway) then all the profits would go to hmg who could also reduce the wage bill of said bank.
    But of course this won't happen as the Tory party are the politcal wing of the banking industry

  • Comment number 76.

    70. At 13:16pm on 28th Feb 2011, NorthSeaHalibut wrote:

    Happening already with corporate acquisitions by the behemoths (I like that word) so why not UK plc government?

    ===========================================================

    except that when Company A gets bought out by Company B the shareholders for Company A get money back as they are having their holdings bought by Company B. this is different to Government C coming in and essentially stealing the shares of Company A.

  • Comment number 77.

    "by a series of unsustainable or socially valueless practices"

    That's very interesting... So, so how come there were so many people who barely had enough money for the stamp duty managed to climb on the housing ladder? If it wasn't for 'sub-prime' mortgages, hardly any first-time buyers could raise the financing required to make their first purchase.

    How about your fixed rate mortgage? It is no more than a massive derivative (interest rate swap) sitting behind a collection of mortgages (RMBS). If banks didn't provide the swaps, there would be no fixed rate. Period.

    How about your car financing? Or your pension schemes? Your ISAs?

    If banks don't provide the products that are deemed "socially valueless", you can say goodbye to most of those 'financial products' that make your lives that little bit easier.

  • Comment number 78.

    Is Usain Bolt moderating this blog?

    I'm half expecting to see one of my entries before I've even written it.

  • Comment number 79.

    69. At 13:15pm on 28th Feb 2011, leftie wrote:
    My pension fund relies in small part on its shares in HSBC - as I imagine many others do too.
    I note that HSBC used to be called the 'Hong Kong and Shanghai Banking Corporation' and did not cost UK taxpayers any bail-outs and has only a minority share of UK banking.
    ===================================================

    But it's still receiving an implicit subsidy from the Bank of England that is paid for by all of us in the form of higher inflation. Personally, I'm not too keen on subsidising your private pension.

  • Comment number 80.

    At present banks like HSBC have the whip hand where a state bank could help is in re-building manufacturing and I would suggest a direct levy is placed on ALL Chinese manufactured goods that currently swamp our stores and effectively make it unattractive to manufacture anywhere else in the world were never going to compete with 1.2BN people without rebalancing through direct measures. The banks have done nothing to help British industry and the new CEO of HSBC is one of those that has help sell off anything British owned to the highest bidder so his bonus can be even larger (investment banks read disinvestment for the UK PLC).
    Britains over reliance on banking will only change if we force change within the system itself the banks will continue to do just what they want its time for systemic change and "Britain First" if we ever want to leave a country worth anything for our children & gran children.

  • Comment number 81.

    So they're threatening to leave if regulated? OK, let's call their bluff and see where else they can go with such low levels of taxation or the enforcement thereof

  • Comment number 82.

    Don't forget giant profits for banks mean that business and personal customers have been ripped off with massive charges, huge interest rates and other damaging expenses.
    Every time a bank makes a massive profit that means money has been taken from people and business that could otherwise have invested in growth.

    I have shelved plans to buy out one business and invest in my own - the current ursurous interest rates and bank charges make it questionable and the stupidity of the bank of England 3 who propose that higher UK interest rates will bring inflation in oil, food and commodoties under control mean that the future is now a certain disaster and very much not conducive to investment.
    (BTW I still would love to hear from any of the 3 how UK interest rates will solve the middle east worries and ease the price of oil).

  • Comment number 83.

    "Public ownership" is said not to work because it tends to bureaucracy and so to inefficiency. More particularly the bureaucracy has no incentive towards greater efficiency or to generate a surplus, because their income does not derive from the service provided - but from general taxation.

    "Private ownership" is said to work because there is an incentive to generate a profit/surplus that can be distributed among the owners/managers. Which begins to look a bit dodgy when there is insufiicient competition to require the benefit of this to be passed on to the consumer.

    Surely, it is not beyond the wit of man to find a business model that combines the best of both these Worlds?

    Not, I hasten to add the model based on inserting pseudo-competition into public services. Consumers of these services do not want a choice between hospitals or schools - they want the best. The only way to spread that demand would be to introduce a differentiated price/quality mechanism and, to me, that is unacceptable.

    However, one could envisage a model in which the consumer "price" is fixed, but the service provider is incentivised to efficiency by the ability to retain and/or invest savings. This would work quite well, I think in the context of a National "Savings and Loans" bank - which could be introduced in competition with the private banks with a remit to hold savings (with a Government guarantee) and to focus on small loans to businesses and private mortgages (at reasonable rates).

    Then let the big banks compete for this business- or if they don't like it, carry on with the casino banking separately.

    ps, If we're not prepared to nationalise RBS and/or Lloyds, then why not base this on the Post Office (which is looking for business and already has a retail network)?

  • Comment number 84.

    76. At 13:23pm on 28th Feb 2011, avalanche_invesmtents wrote:
    70. At 13:16pm on 28th Feb 2011, NorthSeaHalibut wrote:

    Happening already with corporate acquisitions by the behemoths (I like that word) so why not UK plc government?

    ===========================================================

    except that when Company A gets bought out by Company B the shareholders for Company A get money back as they are having their holdings bought by Company B. this is different to Government C coming in and essentially stealing the shares of Company A.

    ---------------------------------------------------------------------------------

    Yep, that's how it works. See any difference to the current corporate theft from shareholders and the public, damned if I can except the wealth is transferred to the public, i.e. public = state, got to be good.

  • Comment number 85.

    Last year, when faced with increased taxes, the banks were all threatening to go overseas. I recall Bahrain, centre of banking in the middle east, was mentioned.

    Even the banks that were not bailed out like HSBC profited hugely from the fact that banks it had deals with did not collapse and result in huge losses for them, or the entire banking system. So before these banks go abroad, let's relieve them of all that taxpayer help they're so ungrateful for. And then let's wave them on their merry way to Bahrain or some other despotic wannabee capital of finance where they can enjoy the low taxes and luxury lifestyle in a 'stable' business friendly environment. At least until the revolution.

    And please, when their offices are being burned down during a popular uprisings in whatever dictatorship they chose to move to, let's not send any warships to rescue them.

    Because they won't be our problem and they really, really don't want our help.

  • Comment number 86.

    I note there is a generally 'anti-bank' sentiment on the comments above and the general reporting of the BBC. This is understandable given that we, the UK taxpayers, have had to bail out some of the largest financial institutions because of their shortsighted management and lack of decent regulation.

    However, do we want HSBC to move overseas? If so, the UK economy would miss out on a considerable amount of revenue. Take the tax contribution for example. Yes, Mr Peston will probably bound around a corporate tax figure (just as was circulated with regards to Barclays) which may or may not seem small in contrast to the profits reported however:

    - Corporate Tax is often set against losses in prevous years (shock, horror -but we can do this for our personal income tax too and carry our individual losses forward too!);

    - Banks are large payers of other taxes too - VAT (which is an irrecoverable cost for them), stamp taxes, environmental taxes and now a bank levy; and

    - Banks are a large employer in our economy - so if we force them to leave, we'd lose jobs and the connected NICS and income taxes

    Now look at HSBC which has not received any Government bail outs... It's a global bank which is head quartered in the UK even though the vast majority of its profit and income comes from overseas and has a prudent policy of loans to deposits. Is this not a Banking model which should be copied as it clearly seems to work much better than the other UK banks?

    My concern is if you punish a successful institution because of the follies of its peers, this could result in losing the jobs and taxes that come with it being headquartered in the UK. The economy will lose a successful business which employs a large number of individuals as part of it being headquartered in the UK.

    Personally, I welcome the fact that our only true 'global bank' appears to be healthy and profitable and I hope that something like the bank levy isn't the straw that breaks the camel's back.

    Particularly as the Bank Levy is a way for the government to claw-back the bail-outs which is something that HSBC didn't require because it was run prudently.

    I guess there are 'banks' and there are 'banks' and a profitable effective bank which has not received any bail-out money such as HSBC is probably the sort that we'd like to keep thank you very much...

  • Comment number 87.

    I remember reading (it may have been in The Economist) that HSBC were little affected by the credit crunch because their Far Eastern bias meant that their deposits were considerably more than their loans. Whoever wrote it was obviously unaware that banks do not lend out their deposits but create money out of thin air.

  • Comment number 88.

    From post 63
    "hmmm so rather than cutting jobs and funding for benefits your saying that the government should directly take away shareholders capital. thats hardly going to be a popular idea ....."

    ...and you suggest taking wealth from the future wealth of the poorest is better!
    Somebody is being really stupid here because wealth can only come from those who have it.

    Also..
    Doug Flint
    Bob Diamond

    Banking is not really as hard as it looks. It's based on a simple trick that is so audacious it's almost unbelievable.
    You deposit money in a bank, they get to use it and your money is still there for you to use.
    That can't be possible, but they make it appear to happen.
    Here's how they do it;

    http://www.youtube.com/watch?v=CB5M5nuTD9w

    There has to be a catch.
    Of course there is but they're not telling.
    You have to find out for yourself.
    You have to REALISE.
    It's a trick after all and gives them a very good living.



  • Comment number 89.

    When will the BBC and media industry in general stop using the term "bankers"? This to the general public means all people who work in banks! Therefore implying all bank staff earn mega big salaries! They dont many high street staff earn little more than minimum wage.

  • Comment number 90.

    This is what the presnt system perpetuates in terms of wealth in the UK which has one of the worst distributions of wealth in Europe and is well behind the US, Japan etc:

    Distribution of Income or Consumption by Percentage Share: United Kingdom -Lowest 10% 2.6, Lowest 20% 6.6, Second 20% 11.5, Third 20% 16.3, Fourth 20% 22.7, Highest 20% 43.0, Highest 10% 27.3

    Read more: United Kingdom Poverty and wealth, Information about Poverty and wealth in United Kingdom http://www.nationsencyclopedia.com/economies/Europe/United-Kingdom-POVERTY-AND-WEALTH.html#ixzz1FGEbz6XE

  • Comment number 91.

    Big deal they only lend other peoples money don't they

  • Comment number 92.


    14. At 11:16am on 28th Feb 2011, apex joked:

    Why did Karl Marx only drink herbal tea ?
    Because all propert tea is theft - boom boom. [ Presumed End of Very Funny Joke]

    A Capital Plaisanterie indeed. FLASH of lightening....ROLL of thunder.....

    The grounds of Highgate Cimetiere are shaking with laughter - ECHOoooing and
    uncontained .

    You made my day.

  • Comment number 93.

    83. At 13:31pm on 28th Feb 2011, tFoth wrote:


    ps, If we're not prepared to nationalise RBS and/or Lloyds, then why not base this on the Post Office (which is looking for business and already has a retail network)?
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    Girobank anyone? For those too young to remember, check out Wiki. This public sector effort wiped the floor with the Clearing Bank cartel in the UK (current big 4), so obviously it had to be privatised, come what may. A lesson for today?

  • Comment number 94.

    87. At 13:46pm on 28th Feb 2011, AnotherEngineer wrote:
    I remember reading (it may have been in The Economist) that HSBC were little affected by the credit crunch because their Far Eastern bias meant that their deposits were considerably more than their loans. Whoever wrote it was obviously unaware that banks do not lend out their deposits but create money out of thin air.
    ==============================================

    Not true. The banks lend (deposits) and borrow (finance for lending etc) on the money markets in order to maintain certain prescribed capital adequacy ratios.

  • Comment number 95.

    One day we'll have a Middle East-style revolution and throw out these despicable people and put them on trial. Should wean our economy off of them first though!

  • Comment number 96.

    Are not all bonuses subject to being taxed when received. So that the government receives a large cut of the bonus?

  • Comment number 97.

    # 25. At 11:50am on 28th Feb 2011, NorthSeaHalibut wrote:

    20. At 11:37am on 28th Feb 2011, mr ff wrote:

    As for those that talk seriously of nationalising banks permanently, get real, public ownership does not work in the long term.

    ---------------------------------------------------------------------------------

    Says who?


    # 27. At 11:56am on 28th Feb 2011, mr ff wrote:

    #25

    Both theory and history, its just inefficient.

    ---------------------------------------------------------

    Inefficient compared to what exactly? And for whom does public ownership not work in the long-term? Banking executives, city traders, joe public?

    Very efficient at getting their hands on our money perhaps, but recent history has clearly demonstrated that the current structure of private banking does not work in the long-term interests of most UK citizens.

  • Comment number 98.

    It could be said...."well done" to HSBC.
    It could be said....HSBC has avoided the mire that so many other banks dived into.
    It could be said....HSBC has many wealthy "friends" all over the world.
    It could be said....HSBC is not a "burden" on the UK public.
    It could be said....HSBC is a great national asset.
    It could be said....HSBC is an example to many other banks of good housekeeping.

  • Comment number 99.

    P.S.
    It could be said....the argument about the "rich-poor struggle" is a totally different argument to the operation and profits of HSBC.

  • Comment number 100.

    99. At 14:14pm on 28th Feb 2011, stevewo wrote:

    P.S.
    It could be said....the argument about the "rich-poor struggle" is a totally different argument to the operation and profits of HSBC.

    -----------------------------------------------

    Perhaps.

    It could also be said....the operation and profits of banks like HSBC are not entirely unconnected to the fact that most working people in this country are getting ever poorer in real terms.

    Hands up all those with above inflation pay rises...

 

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