FCA joins HSBC tax-dodging inquiry

HSBC

The Financial Conduct Authority (FCA) says it is looking into the HSBC bank over its Swiss tax-dodging scandal.

The move comes in the light of last week’s allegations that the bank had helped hundreds of people evade UK tax using hidden HSBC accounts in Geneva.

The regulator’s chief executive, Martin Wheatley, admitted to MPs last week that the FCA had only heard of the scandal via the media.

Now it says it has joined other regulators to probe the matter.

“The FCA is working closely with the firm and other agencies which have an interest in this matter to ensure that any questions this may raise in relation to any current practices and culture of HSBC are addressed,” said the FCA.

The announcement is the first official indication by any UK regulator or authority that it may investigate the role of the bank, rather than just the individual customers who hid taxable income abroad.

However, this action by the FCA falls far short of a full investigation.

A spokeswoman pointed out that the FCA does not regulate tax advice, nor does it regulate the activities of any bank based in Switzerland.

“We are looking at the bank’s conduct and will bring this up with the bank if appropriate,” she said.

Embarrassment

Both the Bank of England and the Serious Fraud Office said last week that they might be prepared to start looking at the scandal, along with HM Revenue & Customs (HMRC).

HSBC published a full-page apology in several Sunday newspapers for the past behaviour of its “private bank” based in Geneva.

The scandal has been a grave embarrassment for the UK’s financial regulators, as well as the bank.

Despite the evidence being in the hands of HMRC for nearly five years, none of the other authorities in the UK had been alerted to it or been asked to take an interest – until now.

And no action has so far been taken against the bank for its role in apparently orchestrating some of the tax-dodging.

Last week, top HMRC officials were lambasted by MPs on the Public Accounts Committee for their “pathetic” response to the evidence, which indicated that some HSBC bankers in Switzerland had actively helped some of their wealthy clients hide their money in secret accounts there.