HSBC was forced to apologise publicly today before the US Senate – and saw its compliance chief resign – over facilitating a multi-billion-dollar money-laundering operation for drug gangs, terrorists and rogue nations worldwide. Britain’s biggest bank was “pervasively polluted for a long time” as it allowed funds to be shifted to and from its branches in the United States as far afield as Mexico, Syria, the Cayman Islands, Iran and Saudi Arabia, the hearing was told. Issuing an apology, Stuart Gulliver, chief executive of HSBC, said: “We have sometimes failed to meet the standards regulators and customer expect… we take responsibility for fixing what went wrong.” HSBC, the only British bank with US branches, is now braced for a “substantial” fine which analysts said could be up to $1bn (£640m). The latest banking scandal comes in the wake of Barclays’ £290m fines for its role in rigging Libor, according to The Telegraph.
China’s job market could suffer a downturn and the government needs to step up efforts to create more positions, Premier Wen Jiabao said, underscoring official concerns about an economic slowdown. “Currently and in the future, China’s employment situation will become more complex and more severe,” the official China Securities Journalquoted Wen as saying. “The task of promoting full employment will be very heavy and we must make greater efforts to achieve it,” he added. Compared with 2008/09, when a sudden collapse of exports sent some 20m Chinese migrant workers homebound, China’s job market has remained relatively tight so far this year, partly reflecting the country’s demographic shifts. But job cuts could be on the rise as small and medium-sized exporters are increasingly struggling with slackening orders, rapid wage increases and higher raw material costs, The Telegraph reports.
Fears of a brain drain at Google have intensified after the defection of Marissa Mayer. The move of one of Google’s rising stars to become chief executive of its fading rival Yahoo! has been hailed as coup for the smaller company. Yet it also highlights an issue for the internet giant in keeping hold of its most-prized executives, given the impregnable position of its founders. Ms Mayer, 37, who revealed yesterday that she was six months’ pregnant, has switched from Google’s inner circle to run a company valued at a tenth of that of her former employer. Nevertheless, Eric Schmidt, Google’s executive chairman, told reporters after the news had broken that “she got a promotion,” The Times says.
Pensions campaigners are warning of a potential outbreak of mis-selling scandals unless the Government tackles the lack of transparency within the industry. Research by a London-based think tank found that 21 of 23 pensions providers failed to reveal management costs that could wipe out more than a third of the overall fund. The report by the RSA came as the Government outlined plans to make it easier for workers to take their work pension with them when they change jobs. It is due to introduce auto-enrolment, in which millions of workers will join company pension schemes unless they opt out.Fears were raised that the latest move could create a pensions lottery, with workers unwittingly seeing their pots transferred into higher-charging schemes, The Times explains.
Britain’s regulators were “in denial” about widespread Libor rigging by banks in the build up to the financial crisis and frustrated US efforts to crack down on the problem, MPs said yesterday. Members of the Treasury Select Committee (TSC) also claimed the Bank of England and the Financial Services Authority (FSA) had been “asleep” in letting Barclays promote Jerry del Missier to chief operating officer last month, after establishing he had instructed colleagues to fix the key inter-bank lending rate. The criticisms came as Ben Bernanke, chairman of the US Federal Reserve, warned that banks’ “unacceptable behaviour” was “undermining confidence in financial markets” and applauded the “quick” response of the Federal Bank of New York, which first uncovered evidence of rigging in back in 2008, The Telegraph writes.
Sir Richard Branson yesterday confirmed he was considering buying back Virgin Records, 20 years after he sold the label to fund his airline. Universal Music, the world’s biggest recorded music firm, is drawing up plans to sell the business to persuade regulators to give the green light to its £1.2bn deal for EMI, whose acts include the Beatles and Coldplay. The Virgin Records label was launched in 1972 and released its first album, Mike Oldfield’s Tubular Bells, the following year. In 1977 it signed the Sex Pistols after they were dropped by EMI and is now home to stars including Bryan Ferry and Joss Stone. In 1992, Branson sold the label to Thorn EMI for about £600m to help fund Virgin Atlantic’s battle with British Airways, but now he is interested in recapturing the business, The Scotsman says.
Federal Reserve chairman Ben Bernanke stopped short of promising fresh stimulus for the US economy even after admitting its performance is “disappointing.” The world’s most powerful central banker also forecast that the drop in the unemployment rate will be “frustratingly slow” in what was a downbeat assessment of the economy before Congress. Hopes had built in financial markets that the Fed chief would use today’s apperance to offer strong clues that the bank is about to embark on another round of printing money. Instead, Mr Bernanke refused to elaborate on an earlier pledge that the central bank stood ready to do more if needed, The Telegraph holds.