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HSBC, Libor and the cynical ethos of international banking
Regulators need to adjust their mindset to financial skullduggery committed by untethered actors in cut-throat global
competition
The HSBC logo, in Hong Kong, 2011. The bank has admitted enabling money laundering operations by Mexican drug cartels.
The City of London and Wall Street are vying for the not-so-envious position of most disliked and least trusted financial centre.
HSBC in London is charged with money laundering, the big banks in London of rigging Libor, and JP Morgan in New York of
having traders behaving badly to the tune of a potential $9bn. Is it something in the air?
Clearly, London is getting the most attention, at least this month. The City at one time had the motto "my word is my bond"
and proclaimed itself to live by that when it came to honoring commitments, mostly in share dealings and the money market. In
today's fast-paced, cynical climate, uttering that motto would only invite predatory behaviour from others.
The financial world has grown so dramatically that the idea of doing unto others as you would be done by has no more meaning
- but it never actually did. What has changed is the spirit of competition: the stakes have changed. Britain's economy is
measured by comparing GDP to the value of transactions in the City on an annual basis. Wall Street does not do that, for good
reason.
The City is dominated by traders, and has been ever since the market existed on Exchange Alley in the early 18th century.
Wall Street is also now dominated by traders, but the ethos is different: it is less dominated by international banks than is the
City of London.
