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Private banking Former HSBC boss regrets problems at Swiss arm

The former head of HSBC, Stephen Green (pictured here in 2010), says he didn't know about alleged tax-dodging practices in the Swiss arm of HSBC

(AP Photo/Vincent Yu)

The former chairman of HSBC said it should have been more careful before buying its Swiss private banking arm, which is alleged to have helped clients evade taxes.

Stephen Green appeared in front of a panel of lawmakers in the UK on Tuesday. The House of Lords economic affairs committee heard from Green that “with the benefit of hindsight, it would have been better to have drilled into the detail much earlier”.

The bank’s Swiss private bank was built up by its acquisition of the Republic National Bank of New York and Safra Republic Holdings in 1999.

Early this year a huge leak of private data covering around 30,000 accounts during the period 2005-2007, published by several major international newspapers and the International Consortium of Investigative Journalists, drew attention to practices at the bank, which are said to have allowed account holders to dodge taxes.

Between 2003 and 2006, Green was HSBC’s chief executive; he then went on to become chairman, a position he stayed in until 2010. He told the panel that he and senior management were unaware of the issues unfolding in the Swiss private banking section of the business.

In 2008, a former IT worker from HSBC in Geneva, Hervé Falciani, took private account data which is said to illustrate how taxes were avoided by some clients at the bank. The files led to the bank admitting that it had failed in some respects in its Swiss operations when it came to following proper compliance rules.

On Tuesday, Green also discussed issues arising from the acquisition of a Mexican business which allegedly assisted clients in laundering money.

In 2002, HSBC took over Grupo Financiero Bital, which US authorities suspected had facilitated money-laundering, including after the acquisition. and agencies

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