Bank of England may look into HSBC tax case

Reuters , Friday 13 Feb 2015

The Bank of England may look into allegations that Europe's biggest bank HSBC helped clients to avoid paying tax, a top BoE official said on Friday.

"The allegations around HSBC raise serious issues around HSBC's conduct," Jon Cunliffe, the BoE's deputy governor for financial stability, told BBC radio.

"We'd expect the management, the leadership of a large group, to be able to ensure that there is a culture and the operations within that group to manage those sorts of risks," he said in an interview. "This is certainly something that could be of relevance to us."

HSBC has admitted failings in compliance and controls in its Swiss private bank after media reports alleged it helped wealthy customers conceal millions of dollars of assets up to 2007.

The Bank of England's Prudential Regulation Authority authorises and supervises HSBC for safety and soundness, making sure it holds enough capital.

PRA Chief Executive Andrew Bailey has raised concerns that the mounting level of fines and other sanctions for misconduct could potentially destabilise banks.

Another regulator, the Financial Conduct Authority (FCA) is responsible for making sure bank employees behave properly.

The FCA, which has powers to fine banks and bar employees, said it won't comment on whether it is investigating any individual bank.

FCA Chief Executive Martin Wheatley surprised British lawmakers on Tuesday when he said he only became aware of the specific allegations against HSBC when they emerged in the media last weekend.

Britain's Serious Fraud Office said on Thursday it was open to discussing the allegations with British tax authority, HMRC.

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