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James Moore: How did top brass fail to spot these scandals?

 

James Moore
Tuesday 17 July 2012 22:49 BST
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Outlook Banks can't seem to help dominating the headlines right now, and they're all bad. Which brings us neatly to HSBC. It is likely to escape the worst of the Libor fixing scandal but has troubles of its own to deal with in the form of a US Senate investigation that has unearthed some very unflattering facts.

The Americans are none too happy about the bank's Mexican business, which they feel has been used to push drug money around the world, among other sins.

To be fair, HSBC has, in contrast to Barclays, recognised that there is a cultural problem, and has taken action. In its case, this has involved a shake-up that will ensure its various businesses are no longer run like semi-independent fiefdoms. There's a new strategy, new risk management procedures, new standards.

Is it enough, though? That remains to be seen. Over the last few days, we have had Libor fixing at Barclays, crazy trading at JPMorgan and yesterday's Mexican malarkey at HSBC.

All very different, you may think. But with one common feature: At each bank, the top executives have supposedly been drawn from the brightest and the best. They have been paid extravagant sums in recognition of the "unique" skills they possess. Yet none of them picked up on the various scandals taking place under their noses.

Not just too big too fail, then, but too big to manage? That's a question that needs asking.

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