Series : The banks and the “too big to jail” doctrine (part 4)

HSBC: the bank with a shameful past and scandalous present

8 June 2014 by Eric Toussaint

The British bank HSBC (Hong Kong and Shanghai Banking Corporation) employs 260, 000 people, has offices in 75 countries, and 54 million customers. [1]
From its earliest days, it has been involved in the international narcotics trade. It was founded in the wake of the British victories in the Opium Wars (1839-1842 and 1856-1860) against China. These two wars were very important to the strengthening of the British Empire and the century and a half waning of China. Through the Opium Wars, the British Empire forced China to accept opium importations coming from British India. China tried to oppose this commerce, but British arms, backed by Washington, proved stronger. London established a colony in Hong Kong in 1865, where HSBC was created by a Scottish merchant specializing in the opium trade— the basis of 70% of Hong Kong trade with the Indies.

As of this time, the history of the bank has been closely related to the interests of British foreign policy and ruling classes in Asia. After 1949 and the victory of Mao’s revolution in China, HSBC retreated to Honk Kong, which remained a British colony. Between 1980 and 1997, it developed its US and European activities, and moved its headquarters to London in 1993 in anticipation of the transfer of Hong Kong sovereignty back to China in 1997. HSBC remains indispensable to Hong Kong finance, still issuing 70% of Hong Kong dollars. Hong Kong is now one of the key links in the money laundering operations set up by the new Chinese ruling classes.

HSBC involved in other financial crimes

In addition to laundering money from drugs and terrorism, [2] HSBC has been incriminated in other affairs. It manipulated exchange markets (revealed in 2013, concerning a market of $5.3 trillion per day), [3] and rigged the LIBOR LIBOR
London Interbank Offered Rate
An average rate calculated daily, based on transactions made by a group of representative banks. There are several LIBORs for some ten different currencies and some fifteen duration rates, from one day to twelve months.
interbank interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. rate. [4] It was also involved in the abusive and fraudulent sale of interest rate derivatives Derivatives A family of financial products that includes mainly options, futures, swaps and their combinations, all related to other assets (shares, bonds, raw materials and commodities, interest rates, indices, etc.) from which they are by nature inseparable—options on shares, futures contracts on an index, etc. Their value depends on and is derived from (thus the name) that of these other assets. There are derivatives involving a firm commitment (currency futures, interest-rate or exchange swaps) and derivatives involving a conditional commitment (options, warrants, etc.). , and the abusive and fraudulent sale of insurance products to the British public and small companies (the Financial Services Authority prosecuted HSBC for having sold policies that were of little or no value). [5] Finally, it sold Mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral.
Backed Securities abusively in the US, rigged gold and silver prices (revealed in Jan. Feb. 2014) [6], and assisted major tax evaders (see below).

Hervé Falciani: the Edward Snowden of HSBC?

Hervé Falciani is a Franco-Italian, who worked at HSBC as a systems engineer between 2006 and 2008 in Geneva. Before leaving, and moving to France, he copied 127, 000 documents that actively linked HSBC to massive fraud and tax evasion operations. Switzerland issued, through Interpol, an International Arrest Warrant for data theft, banking and commercial secrecy violations, and industrial espionage. Switzerland has not prosecuted HSBC.

In early 2009, French police searched his home in Nice, where they seized explosive documents naming thousands of tax evaders, 8231 French, 800 Belgians, more than 600 Spaniards, about 2000 Greeks were on the famous “Lagarde list” that the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
director gave to Greek authorities in 2010, as well as many Germans, Italians, and Americans.

Hervé Falciani then worked with authorities from Paris, Washington, and other countries to which he gave information that helped advance the investigations concerning HSBC’s laundering of money from Mexican and Columbian drug cartels. During a visit to Spain in 2012, to assist Spanish authorities, he was arrested under the Interpol warrant and Switzerland requested his extradition. Spain rejected this request, because he was a principal witness in several big affairs of fraud and tax evasion. [7] The information provided by Falciani permitted Spanish authorities to discover about €2 billion deposited in Swiss accounts by the family of Emilio Botin, President of Santander Bank, who paid a €200 million fine. The scandal of the fraudulent financing of Mariano Rajoy’s Popular Party was also brought to light. [8] Belgian and French authorities met Falciani and used the information obtained to conduct investigations on tax evasion. It is not at all certain they will result in condemnations, it is more likely that out of court settlements will let the fraudsters off the hook.

Not only Switzerland wants to have whistle-blowers arrested, Greece has also prosecuted the editor of the magazine Hot Doc, Kostas Vaxevanis, for having dared to publish, in October 2012 the Lagarde-HSBC-Falciani list that the Greek authorities had somehow misplaced. He was finally acquitted due to public and international pressure. It is not easy to accuse a bank and the rich fraudsters it protects, nor to denounce the rich fraudsters who protect their sacred banks and banking secrecy.

There is true symbiosis between big banks and the ruling classes, just as there are permanent links between politicians and big business, particularly in finance.

HSBC finds a loophole in a European Union Directive

In 2013, the EU announced that it was capping bank bonuses for directors and traders at twice their fixed salary. A salary of €1.5 million would limit the bonus to €3 million, which amounts to total annual income of €4.5 million. To get around this measure, HSBC simply increased the fixed salary to maintain the level of bonuses. [9]


The HSBC group should be shut down, its directors dismissed without indemnities, and along with the major shareholders, they should answer for their crimes before the courts and be severely condemned to periods of loss of liberty and of community service. HSBC should be split into smaller units under public control with a strictly defined public service objective.

Translation : Mike Krolikowski and Charles La Via

Part 1
Part 2
Part 3
Part 4
Part 5
Part 6 Only in french
Part 7
Part 8
Part 9

Eric Toussaint, is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège. He is the President of CADTM Belgium (, and sits on the Scientific Council of ATTAC France. He is the co-author, with Damien Millet of Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He is the author of many essays including one on Jacques de Groote entitled Procès d’un homme exemplaire (The Trial of an Exemplary Man), Al Dante, Marseille, 2013, and wrote with Damien Millet, AAA. Audit Annulation Autre politique (Audit, Abolition, Alternative Politics), Le Seuil, Paris, 2012. See his Series “Banks versus the People: the Underside of a Rigged Game!”


[1Official site:

[2Eric Toussaint, Bank abuses in the real estate sector and illegal foreclosures in the United States, published 28 May 2014,

[3Eric Toussaint, “Comment les grandes banques manipulent le marché des devises (How the big banks manipulate the exchange markets)”, Le 13.03.2014 (in French only)

[4See part 5 of this series soon to appear in English

[5Le Monde, “Cernée par les scandales, HSBC ternit un peu plus la réputation de la City (Trapped by scandals, HSBC further tarnishes city reputation)”, 1 August 2012 (in French only).

[6Financial Times, “Fears over gold price rigging put investors on alert. German and UK regulators investigate,” 24 February 2014.

[7Le Soir, “Vol de fichiers bancaires chez HSBC : le récapitulatif” (Theft of bank data at HSBC: an update), 8 May 2013,

[8Le Monde, “Evasion fiscale : le parquet espagnol s’oppose à l’extradition de Falciani, ex-employé de HSBC (Tax evasion: Spanish courts refuse extradition of ex HSBC employee, Herve Falciani”), 16 April 2013 (In French only).The New York Times, “A Banker’s Secret Wealth,” 20 September 2011, “The French government passed on to Spain data that it had obtained from Hervé Falciani, a former employee in HSBC’s Swiss subsidiary, naming almost 600 Spanish holders of secret bank accounts. Among those was one belonging to the estate of Mr. Botín’s father.”

[9Financial Times, “HSBC plans to sidestep EU Bonus cap revealed”, 25 February 2014.

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Greece 2015: there was an alternative. London: Resistance Books / IIRE / CADTM, 2020 , Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012, etc.
See his bibliography:
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

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