HSBC scoffs at Obama bank plan
HONG KONG: HSBC chief executive Michael Geoghegan said on Wednesday that tough new banking rules in the United States and Britain would have little impact on the financial services giant.
US President Barack Obama is calling for rules to limit “excessive” risk taking and “protect” taxpayers by preventing banks or financial institutions from owning, investing in or sponsoring hedge fund or private equity funds. Proposed measures in the UK include requiring banks to boost the amount of money they keep on hand to offset possible losses.
Geoghegan, who recently transferred from HSBC’s London headquarters to the Asian financial hub, said the company’s balance sheet was well capitalized with “surplus liquidity,” adding, “I don’t think it will affect us that much. What’s been mentioned by President Obama and has come out already in the UK from the FSA (Financial Services Authority) are discussions, documents. I suspect when they actually become regulations they will be slightly different.”
Geoghegan’s comments come a day after HSBC chairman Stephen Green lashed out at “inflated” bonuses to bankers, in an interview with the Financial Times. Green said there had been “plenty of distortion” in bank pay which had given rise to “wrong and frankly inflated” bonuses.
Obama’s plan, which was panned by Wall Street and sent stock markets into a freefall last week, must still be approved by Congress.