Lord Green has written to Chris Leslie, Labour’s shadow treasury minister, to give his first response to allegations that HSBC allowed Mexican drug gangs to use the bank to launder their money while he was chairman.
Borrowing a phrase from George Osborne, Labour insisted Lord Green had “questions to answer” over what and when he knew about the allegations. Lord Green is in no mood to answer those questions however. In his letter, he says:
Thank you for your letter of 21 July, regarding the recent Senate Subcommittee investigation into HSBC.
Stephen Hester has warned that ring-fencing banks could create systemic risk in the system, the opposite of its desired effect. The chief executive of Royal Bank of Scotland is currently being grilled by the Treasury select committee in Portcullis House, Westminster.
The question is pertinent because some form of internal ring-fencing is the recommendation of the Independent Commission on Banking.
It was put to Hester by Andrew Tyrie, chairman of the committee, and the bank chief at first prevaricated. Put on the spot, he said his belief was that, on balance, ring-fencing would cause problems.